An Individual Retirement Account (IRA) allows an individual, with an earned income, to save for their future retirement by setting aside funds in a tax advantaged account. Funds can be deposited into a bank account, certificate of deposit, or invested into many types of investments such as stocks, bonds, mutual funds, precious metals, and more. The 2024 contribution limit is $7,000 per person, with an additional $1,000 catch-up contribution allowed for those age 50 and above.
There are two types of IRAs, traditional and Roth. Traditional contributions reduce taxes in the year contributed, but all withdrawals will be taxable in retirement. Roth contributions do not offer a current year tax deduction, but all withdrawals in retirement, including the growth, is tax free.
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