Get the facts about Individual Retirement Accounts (IRAs)
An Individual Retirement Account (IRA) is a retirement savings account to help you grow money either tax-free or tax-deferred, depending on the type of IRA you choose. Anyone under the age of 70½ can open and contribute to an IRA. IRAs can help ensure financial security in retirement by supplementing a 401(k) or company pension plan. For some people, IRAs offer a primary foundation for retirement savings.
Breaking down IRAsOnce you’ve made the decision that an IRA is right for you, you need to do 2 things:
- Pick an IRA plan. The most common IRA plans are Traditional, Roth and SEP IRAs. Depending on your age and taxable income, you could have more than one IRA plan to choose from. And choosing more than one plan could help you meet your goals, whether you’re just getting started on saving for retirement or adding to a nest egg you’ve been building for years.
- Add IRA products. Once you choose an IRA plan, you can typically choose from a variety of products, from lower risk savings accounts and certificates of deposit to higher risk stocks, bonds and mutual funds. Ally Bank’s IRA products include CDs and online savings accounts that allow your money to grow with less risk than investments like stocks on either a tax-deferred or tax-free basis.
Other things to know about IRAs
- IRA Contributions & Distributions. Because IRAs are meant to help you save for retirement, there are restrictions as to how you can add money to IRAs and when you can use the money you’ve saved.
- IRA Rollovers & Transfers. There are several different ways to move your retirement money around to make the most of it. You can choose to have the assets distributed to you directly or transferred to another plan for you.
- Converting to a Roth IRA. You can convert your Traditional IRA to a Roth IRA, regardless of your income and marital status.