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IRA Advantages
Home » Retirement » Types of IRAs » IRA AdvantagesThere are several reasons why an IRA is a wise investment. Through the years our average life span has continued to increase. As we live longer, our need for money to support these extra years also increases. We face more years after retirement without our monthly wages than our forefathers did years ago. The IRA savings helps supplement that loss of monthly wages. It bears remembering that the IRA income (unless you choose a Roth IRA) is allowed to accumulate through the years without being taxed and therefore will accrue quicker than income that is taxed each year.
Social Security: If we have worked, we have paid Social Security and FICA taxes through the years. With the uncertainty over this savings system in question, it behooves each of us to provide retirement savings over and above Social Security. Those who have a fairly high standard of living may consider Social Security lacking and inadequate to support their current standard of living.
Employer Offered Plans: Many employers offer retirement plans through payroll deduction and corporate sponsored plans. This plan can provide a nest egg for the retiree but cease if the employer changes jobs. This is a wonderful benefit but is not always offered to employees. This is not a guaranteed retirement benefit. Unfortunately, if the economy declines so does the employer’s ability to provide its employees with retirement plans. The part-time worker, new or temporary employee usually doesn’t qualify for the plan. These are just some of the reasons why is may be wise to invest in an IRA. Whatever type of IRA best fits your needs, it is important to maintain and keep records! If you can’t prove IRA status, penalties can be imposed and you could end up paying taxes twice on your contributions.
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