What is an IRA?
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IRAs, or Individual Retirement Accounts, are a great way to save for retirement and to receive a tax deduction.
IRAs have the advantage of not being tied to a person’s employer so, if you quit your job, you won’t have to worry about moving your plan like you do with a 401(k).
Like 401(k)s, IRAs have an immediate tax advantage, in that you may be eligible for a tax deduction. The amount of your deduction is based on your income, filing status and whether or not you have any 401(k)s. When you are ready to withdraw money, you will need to pay taxes but, because your income is likely lower in retirement than when you contributed, you will be in a lower tax bracket and will, as a result, pay less.
The contribution limit for an IRA is $5,500 ($6,500 if you’re over 50) – the limit is shared with Roth IRAs – and the money grows tax-free in the plan.
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LEARN MORE ABOUT: IRA Accounts
INVESTING IN A GOLD IRA: Gold IRA Account
INVESTING IN A SILVER IRA: Silver IRA Account
REVEALED: Best Gold Backed IRA
An individual retirement account (IRA) is a popular investment tool that enables individuals to save money for retirement. It offers various tax advantages, making it an attractive option for many investors. In this article, we will discuss what an IRA is, its different types, and why it is a valuable financial instrument.
What is an IRA?
An IRA is a type of retirement account that allows individuals to save and invest money for their retirement years. It is a personal savings plan that provides tax advantages to encourage people to save for retirement. The funds contributed to an IRA can be invested in a range of investment vehicles such as stocks, bonds, mutual funds, and even real estate depending on the type of IRA chosen.
Types of IRAs
There are several types of IRAs, each with its own eligibility requirements and tax advantages. The most common types of IRAs include:
1. Traditional IRA: With a traditional IRA, contributions are tax-deductible, reducing your taxable income in the year of contribution. The investments in the account grow tax-deferred until withdrawals are made during retirement, at which point the withdrawals are taxed as regular income.
2. Roth IRA: In contrast to a traditional IRA, contributions to a Roth IRA are made with after-tax dollars, and as a result, withdrawals during retirement are tax-free. Roth IRAs are attractive for those who expect to be in a higher tax bracket when they retire since tax savings are realized when making the contributions.
3. SEP IRA: Simplified Employee Pension (SEP) IRA is a retirement plan for small businesses or self-employed individuals. Contributions to a SEP IRA are tax-deductible, and the withdrawals during retirement are taxed as regular income. SEP IRAs can provide higher contribution limits compared to traditional and Roth IRAs.
4. SIMPLE IRA: Savings Incentive Match Plan for Employees (SIMPLE) IRA is another retirement plan option primarily targeted at small businesses. Both employers and employees can contribute to a SIMPLE IRA, which provides tax advantages similar to traditional IRAs.
Why are IRAs important?
IRAs offer numerous benefits that make them an essential part of retirement planning:
1. Tax Advantages: Whether it’s the immediate tax deduction on contributions or the tax-free growth and withdrawals in the case of a Roth IRA, IRAs provide individuals with significant tax advantages.
2. Flexibility: IRAs allow individuals to choose from a wide range of investment options. This flexibility enables investors to tailor their portfolios to their risk tolerance and investment goals.
3. Retirement Savings: In an era when employer-sponsored pensions are less common, IRAs serve as a vital tool for individuals to save for retirement independently.
4. Estate Planning: IRAs provide an opportunity for individuals to pass down their retirement savings to their beneficiaries in a tax-efficient manner, ensuring their loved ones benefit from the funds.
In conclusion, an Individual retirement account (IRA) is crucial for retirement planning. With its tax advantages, investment flexibility, and ability to secure financial stability during retirement, an IRA plays a pivotal role in helping individuals achieve their retirement goals. Whether it’s a traditional IRA, Roth IRA, SEP IRA, or SIMPLE IRA, these accounts offer unique benefits to individuals depending on their financial situations and retirement needs.
Depositing money like Mike in IRA sounds like a great idea but what bothers me about this situation is the fact that the news and media are all going about a recession which is understandable due to the war and pandemic but still the same media still publish articles about folks in the same economy pulling off hefty 6 figure profit(Average. 200k in barely 8 weeks) in this downtrend.
How is that even possible?
I am 55 years old with no passive income and very little set aside for retirement at this point. I have always been curious about the stock market and have witnessed some people who played the game right and retired early because they used the stock market. When I ask them, most said that they invested very little to start with, but their portfolio grew. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns.
Act 16:31 And they said, “Believe in the Lord Jesus, and you will be saved, you and your household.”
1Co 15:1 Now I would remind you, brothers, of the gospel I preached to you, which you received, in which you stand,
1Co 15:2 and by which you are being saved, if you hold fast to the word I preached to you unless you believed in vain.
1Co15:3 For I delivered to you as of first importance what I also received: that Christ died for our sins in accordance with the Scriptures,
1Co15:4 that he was buried, that he was raised on the third day in accordance with the Scriptures,
Joh 3:16 For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life.
Joh 3:17 For God did not send his Son into the world to condemn the world, but in order that the world might be saved through him.
Joh 3:18 Whoever believes in him is not condemned, but whoever does not believe is condemned already, because he has not believed in the name of the only Son of God.
Rom 10:9 because, if you confess with your mouth that Jesus is Lord and believe in your heart that God raised him from the dead, you will be saved.
Rom 10:10 For with the heart one believes and is justified, and with the mouth one confesses and is saved.
Act 4:12 And there is salvation in no one else, for there is no other name under heaven given among men by which we must be saved.
Eph 2:8 For by grace you have been saved through faith. And this is not your own doing; it is the gift of God,
Eph 2:9 not a result of works, so that no one may boast.
Eph 2:10 For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them.
Rom 3:23 for all have sinned and fall short of the glory of God,
Rom 3:24 and are justified by his grace as a gift, through the redemption that is in Christ Jesus,
Rom 3:25 whom God put forward as a propitiation by his blood, to be received by faith. This was to show God's righteousness, because in his divine forbearance he had passed over former sins.
Rom 3:26 It was to show his righteousness at the present time, so that he might be just and the justifier of the one who has faith in Jesus.
Rom 3:27 Then what becomes of our boasting? It is excluded. By what kind of law? By a law of works? No, but by the law of faith.
Rom 3:28 For we hold that one is justified by faith apart from works of the law.
Tit 3:5 he saved us, not because of works done by us in righteousness, but according to his own mercy, by the washing of regeneration and renewal of the Holy Spirit,
Tit 3:6 whom he poured out on us richly through Jesus Christ our Savior,
Tit 3:7 so that being justified by his grace we might become heirs according to the hope of eternal life.
Tit 3:8 The saying is trustworthy, and I want you to insist on these things, so that those who have believed in God may be careful to devote themselves to good works. These things are excellent and profitable for people.
Is it good to have both a 401k and an IRA that way you have two sources of income for when u retire?
Great video! You described nicely and clearly what an IRA is. I wished you did some Pros and Cons comparison but that's beside the point. I also hope you have a video talking about the other different types of Retirement Accounts. Either way, love your explanation, and thank you!
So in this IRA, who choses where to invest the money in? Can the owner of the IRA choose which stocks to put their $ in? Is there any fee's in these IRA's other than penalties? Thank you in advance.
hi bro i was enjoying the video understanding your this topic for me to understand even more..i somehow came to idea that we can both benifit share you may ideas for good content
if your interested in conscious outside the box ideas.
What if I die before 60?
You still get taxed though even if you save 1000 bucks. The government is a pyramid scheme run riot
How can you be sure that the tax rate will be lower at the time of retirement?
Why don’t they teach this in school?
Thank you. I just dislike the fact that the government wants to tax you money you earned and saved for your future
I live in ireland and ira is very different
Hey! Stash is an app for banking, saving, and investing. https://get.stash.com/jessica_h1ktchr
https://youtu.be/iFDe5kUUyT0
Damn $100,000 and only 30 years old mike is making bank
Si why would I do that in the first place, hey bank here’s my money you can take 3,000 when I need it back, thanks. WTH
Ahem.. inflation
Why do all the examples people use in IRA videos have people making 2-3-4x the real world rate of people their age?
IRA=Irish Republican Army
Sounds like some bullshit to me…
#IRA #401K #CDC #$avings ;),
love you thank u baby for simplifying everything
Sinn Féin wants to know your location
What a scam I have 10k I'll give it to a bank and in 30 years I'll get 8k back instead of 7k wow so the bank took 2k lol. If Mike had barried that 10k in the yard and dug it up itd still be 10k.
All these taxes but didnt the pilgrims leave and rebel and throw mad tea in the boston harbor to fight taxation and prosecution for their beliefs… how the hell we end up like this then? This country is shit. And getting worse.. and we could stop it if we stood together.. but the system plays us against each other and floods our senses with b.s to keep us in check… and yet we continue to let it happen… when will it end
Mike puts money in IRA stock, instead of spending it on vacation. At the age of 60-something, freemasons decide to crash US Stock market. Mike gets screwed. Mike had no life. His little 2 weeks of paid vacation, which are considered "benefits" in the fucking States, Mike use to spend in America for which he believed that is the best place on the earth, just because Fox News said it. He wasted his life working for others, paying rent to others and now he does not even have that money + he never had a proper health insurance in his life. Such a nice place to spend the life in. Land of free with the most prisoners per capita in the world!
Is that mike from suits ?
Open account in pakistan if you deposit 100000 usd for 10 years after 10 years you will recive 334000 usd more then double there is no minimum to invest its in goverment bank
Irish
Republican
Army
So what you are saying is pointless to save money in your IRA. Wow! It's nothing but games when it comes to money.
Mike waits 30 years to pay $1000 less? This system crews you no matter what! Start your own businesses!! No escaping taxes but at least you’re not working 30 years building someone else’s dream! This is some grade A BS…
I guess you'd have to put the money into the stock market too because inflation will make that money worth a lot less? If you can't find some way to grow the money you put in, I assume inflation makes an IRA bad.
Cool
Thank you! Thank you! Thank you!
Every other video on IRA just keeps giving confusing details as opposed to just saying plain and simple what IRA is
how about just get cash
Good!
hahaha…you deposit 10.000 and avoid 30% taxes. After 30 years you withdraw the money with only 20% taxes and get the 80.000…then you can go to buy a bicycle with it :)))
Mike donates to his ira and it is used to buy armalites
Blame those assholes at Kodak in the 70s. They were only thinking about themeselves in order to pay less taxes.
In the end I don't think IRA having ROTH or any IRA is worth it. How is it worth it if you are not only putting pennies into account I took it out and never will go and save for "retirement" it's a joke now a days.