Reviewing Your IRA at Year End
An Individual Retirement Account, or IRA, should be an integral part of your Dallas retirement planning. But what exactly is an IRA? What does it do? Why should you review it at the end of every year? Here are Retire Guides’ facts about IRAs that any Dallas financial advisor should inform you about.
What Are IRAs and How Do They Fit into Your Dallas Retirement Planning?
IRA stands for Individual Retirement Account, a long-term savings account that individuals with earned income can use to save for their retirement with the benefit of certain tax advantages. IRAs are mainly meant for business owners and self-employed people who do not have access to workplace retirement accounts such as a 401(k), which is available only through employers. Types of IRAs include traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. Your Dallas retirement financial advisor will advise you as to which type of IRA is best matched to your retirement plans. Annual income limitations apply to deducting contributions to traditional IRAs and contributing to Roth IRAs. IRAs are meant to be long-term retirement savings accounts. The money you keep in it can’t usually be withdrawn before you reach the age of 59 years and 6 months. A tax penalty of 10% of the amount withdrawn is levied on such early withdrawals.
Why An Annual IRA Review is Essential to Dallas Retirement Planning
At the end of every year, you and your Dallas financial advisor should go over your entire retirement plan and all its components to see if the progress you’ve made in the past 12 months lines up with your retirement goals. If things are going well, it’s a sign that you should stick to your existing plan. If the results come up short, then it might be time to consider taking a new direction in your Dallas retirement planning. Your IRA is an essential component of any retirement plan, which is why you need to be monitoring if you are reaching your savings goals or if you are getting the full benefits of the tax advantages these accounts offer. Either way, you will need the help of a Dallas retirement financial advisor to help you navigate all of your options. And that’s where Retire Guides comes in.
How Retire Guides Enhances Your Dallas Retirement Planning
As your trusted Dallas retirement financial advisor, Retire Guides will provide you with helpful benchmarks and assist you in reaching maximizing the benefits of your IRA. From helping you select which type of IRA to open to making the most of the tax advantages they offer, we’re here to help you navigate the details so that you can focus on enjoying your retirement. Get in touch with us and let’s start your journey today!