If money talks, then retirement is faint white noise you can’t seem to get rid of. That’s right; saving for retirement isn’t precisely the dinner topic of conversation. However, the sooner you start saving, the more you’ll want to shake hands and buy a drink for yourself.
But diving into the tedious world of retirement savings can prove a daunting task for most millennials. Luckily, most employers handle all the dirty work for retirement savings, so many people hardly even have to give it a second thought. There is something to be said for studying up on the benefits of IRAs, though. If you don’t know, you’re about to!
Individual Retirement Account
IRA stands for Individual Retirement Account, and it’s a retirement savings account with tax deferral and tax exemption benefits. The two most well-known IRAs are traditional IRAs and Roth IRAs. While they are similar in structure, they each have some key differences.
Traditional vs Roth IRAs
Traditional IRAs provide tax deferral benefits, meaning that you won’t pay taxes on the account until you start withdrawing from it. Furthermore, everything you put into a traditional IRA is tax-deductible. You can reap some excellent returns from this IRA come tax season.
Roth IRAs, in contrast, provide tax exemption benefits. While you’ll never have to pay taxes on deposits or withdrawals from Roth IRA accounts, you do have to meet specific income requirements to open one.
Are you feeling pumped about your new savings possibilities? Read on for more details about the two IRA accounts and how they can help jumpstart your golden years.
Infographic designed by Accuplan
PS Hope this was informational ?!
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