Retirement may seem like a long way away but, as many say, “time flies.” And before we know it, the kids are grown and the time to retire from work is just around the corner. That is why we must begin to prepare now, to be able to ensure a retirement full of enjoyment and without financial problems.
Here we share 4 reasons why opening an IRA is the effective way to save for retirement.
1.Long-term investment and savings
Ensuring a worry-free retirement is arguably the reason for the Individual Retirement Account (IRA). It is an account that helps you invest while you save for your retirement. There are different types of IRA accounts, and the type of investment for your savings will depend on the one you choose. From investing in bonds and stocks, for greater growth potential, to more conservative investments with guaranteed fixed returns.
2. Short-term tax savings
Another great benefit of opening an IRA is that you receive tax savings on your income tax return. To make the most of your tax savings, you can contribute up to $5,000 a year to an individual IRA. That money will be deductible from your payroll. The amount you open an IRA with, however, depends on what is comfortable for you. At a minimum, you can open an IRA with as little as $250.00.
3. Saving for your retirement
Aside from contributory savings, the IRA is a great retirement savings tool, since the money is not touched until you turn 60 years old. If you decide to withdraw the money early, penalties may apply from the Bank and/or the Treasury Department. There are particular exceptions in which you can withdraw the money prematurely, such as your children’s university education, the purchase of your first residence, chronic illnesses, unemployment or disability, among others. But the idea is that you can keep your money safe and untouched until it’s time to retire.
4. Your money is protected
Another great benefit of having an IRA account, or several, is that this money is protected against third-party lawsuits. It cannot be seized by your creditors for any reason. Even if you declared bankruptcy, your money would remain safe and completely yours. So IRAs, in addition to being a savings tool, serve to protect your money.
Whatever your needs, there is an IRA perfect for you. From growing your money in the long term by investing in the market, to saving conservatively, generating stable income by investing in instruments with guaranteed returns. At Oriental we have several IRA account options to choose from and financial advisors to help identify the one that best suits your needs.
