5 Great Reasons to Have an IRA

When you began planning for retirement, you might have opted into whatever plan you were offered at the time. Often this is an employer’s 401(k) fund, although other options are sometimes available.

However, at some point, you might begin to wonder if there are other ways to prepare for retirement. Or, if you’re self employed, you haven’t been “offered” anything! The burden of planning falls squarely on you. So, if you’re exploring your retirement planning options, you might wonder what an Individual Retirement Account (IRA) has to offer.

An IRA is portable. When you enroll in your employer’s retirement plan, you might face a difficult decision if you ever terminate your employment. An IRA is not tied to a particular employer and stays with you, wherever you go.

Save more money for retirement. Let’s assume you already participate in your employer’s 401(k) or some other retirement planning option. You can also open an IRA, and save an additional $5,500 per year (or $6,500 if you’re age 50 or older). So you can save more for retirement, if you’re worried about being well prepared.

An IRA offers flexibility. We often find that an IRA offers investment options that are not available through most 401(k) plans. For example, private equity, real estate, and precious metals investments can be accessed through some IRAs. You might consider an IRA if you’re very interest in those types of investments for some reason.

Tax-free income in retirement. If you choose a Roth IRA, you can make after-tax contributions to the account, and then enjoy tax-free income in retirement someday. This might be a good option if you’re worried about your income tax load in the future.

A good option for business owners or the self employed. The tax structure of IRAs often appeals to those who are self employed, or own their own business.

If you’re considering an IRA as part of your retirement planning strategy, give us a call before you make any big decisions. We can help you research your options, plan for tax consequences, and decide how to proceed.