Not everyone plans for tomorrow. And for those who'd rather live for today, the subject of retirement rarely is first on their list of priorities. Ask "What is an IRA account?" and the response may well be a blank stare. But time catches up to everyone, so it’s smart to plan for the future.

An IRA Should Be Part of Your Nest Egg

An IRA (individual retirement account) is a financial vehicle that provides tax incentives to encourage individuals to save money for their years after employment."IRAs are a crucial part of a retirement strategy," said Nicholas LaVerghetta, a certified financial planner with NCM Capital Management, LLC, in Ramsey, New Jersey. He added, "I stress to clients that the sooner one can open one and start contributing, the better off they will be."

There are different kinds of IRAs, and they can hold a wide range of financial products, from higher-risk choices like stocks to lower-risk products like CDs. The range of options ensures that you are likely to find an IRA that fits into almost any financial plan.

An IRA Is Portable.

You can roll over money from some other retirement plans into an IRA. And many experts say this often can be a wise decision. Leaving your current job gives you the opportunity to roll your 401(k) into an IRA. That move often gives you more investment options than either leaving the funds in the old 401(k) or putting it into your new employer’s plan. Plus, it stays with you if you change jobs again.

Handle IRA Rollovers With Care

You need to handle any rollover properly if you want to avoid paying taxes on the disbursement. As a general rule, you have 60 days from the day you receive the money to complete a rollover to avoid taxes. And you may only roll over funds from the same IRA once every 12 months for traditional and SEP (simplified employee pension) IRAs. There's another wrinkle: If you have your old employer cut you a check for the money, it will be subject to 20 percent withholding and possible tax penalties, even if you plan to roll it over. To avoid that headache, financial planners recommend a direct rollover, where the funds go straight from your old plan to your IRA.

Ally Bank Is Here to Help

We make it easy to open an IRA at Ally Bank. Learn more about IRAs, rollovers and more at or call live, 24/7 customer care at 877-247-ALLY (2559).

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