If your current place of employment does not offer a company-sponsored retirement plan, you’re in luck because you can save for retirement on your own. You can invest into an Individual Retirement Account (IRA). Investopedia defines an IRA as a savings account with tax advantages that individuals can use to save and invest for long-term. Anyone with earned income can invest their hard-earned money into an IRA, but they are subject to contributions limits and early withdrawal penalties (before age 59 ½). Another great aspect of an IRA is long-term tax advantaged growth, where you do not have to pay taxes on your gains until you take it out at age 72. You are required to withdraw a set amount each year based off your life expectancy. Now the million-dollar question is, when should you begin an IRA account? As early as your finances will allow you to contribute. You are able to increase/decrease your contributions as your financial situation changes.
Source: https://www.investopedia.com/terms/i/ira.asp
Branden has been a key member of the Independent Financial Services (IFS) team since 2013. He is a Financial Advisor, Portfolio Technician, Certified Financial Planner, and Accredited Asset Management Specialist. Branden’s professional registrations include the Series 7, Series 66 as well as Florida Life, Health and Variable Annuity insurance licenses. As a Financial Advisor, Branden develops financial plans for clients which includes creating and modeling different possible financial scenarios, preparing client reports along with providing key recommendations for helping clients achieve their financial goals.
Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.