What is an Individual Retirement Account (IRA)?
An individual retirement account (IRA) is a tax-advantaged investment account that individuals can use for retirement savings. There are several types of IRAs, such as traditional, Roth, SEP or SIMPLE. Contributions to some IRAs may be tax-deductible or withdrawals may be tax-free.
Why invest in an IRA?
Putting money in an IRA can help you better prepare for retirement, plus it can help you save on taxes and get access to investment options that your workplace retirement plan might not offer. In an IRA, your savings may grow faster than in a taxable account.
How does an IRA work?
You can open an IRA at Heritage Bank, online advisor or a broker. If you open an IRA at a broker or online advisor, you’ll be able to invest in stocks and bonds. IRAs from Heritage Bank offer certificates of deposit.
Ready to get started?
You invest the money in the IRA account. You can invest in stocks, bonds and other assets. How your account balance grows over time depends on how you invest and how much you contribute to the IRA.
- IRAs have annual contribution limits. Generally, you (or your spouse) must have earned income to contribute to an IRA.
- There are withdrawal rules. You may face a 10% penalty and a tax bill if you withdraw money before age 59 1/2, unless you qualify for an exception.
When you are ready to invest or want more information, contact our Universal Bankers!