Secondary Tag: Individual Retirement Accounts
Roth IRAs
What is a Roth IRA and how does it work? A Roth IRA grows tax-free, and if an individual withdraws the money after age 59 ½ and the account has been in place for at least 5 years, the withdrawal will not be taxed. However, contributions to the Roth IRA are not tax-deductible. Who can […]
Traditional IRAs
What is a Traditional IRA and how does it work? The most common IRA, a Traditional Individual Retirement Account, allows an individual to get a tax deduction for money that is set aside for retirement. The money put into an IRA and the investment earnings on those contributions are not taxed until they are withdrawn. Who can set up a […]
Inherited IRAs
What is an Inherited IRA? If you are named as a beneficiary of the IRA of someone who has died, the amount you inherit becomes an Inherited IRA. The rules that apply to Inherited IRAs differ depending on the type of IRA you inherit and whether you are the spouse of the deceased IRA owner. […]
Payroll Deduction IRAs
What is a Payroll Deduction IRA? A Payroll Deduction IRA is an arrangement that allows employees to contribute to an Individual Retirement Account through their employer. Any employer can choose to set up a Payroll Deduction IRA. How does a Payroll Deduction IRA work? If an employer sets up a Payroll Deduction IRA, it is […]
Nondeductible IRAs
What is a Nondeductible IRA? A Nondeductible IRA is like a Traditional IRA in all respects but one: An individual cannot take a tax deduction for contributions made to the IRA. Who can set up a Nondeductible IRA? An individual can set up a Nondeductible IRA if that person is covered by a pension, 401(k) […]
Rollover IRAs
What is a Rollover IRA? In a retirement plan that permits an individual to withdraw money when changing jobs or retiring, that person can postpone paying income taxes on the amount distributed if the money is transferred into a Rollover IRA (or into another retirement plan). An individual can also transfer money from one IRA […]
