What Is an Individual Retirement Account (IRA)?
A retirement account is a great way to go when planning for your future—specifically, an Individual Retirement Account, also known as an IRA. There are many types of Individual Retirement Accounts and ways to invest in them. Keep reading to learn more about Individual Retirement Accounts, the benefits of investing in one, and how to get started today.
Types of Individual Retirement Accounts
An Individual Retirement Account (IRA), according to Investopedia, is a tax-advantaged account that individuals use to save and invest for retirement. The Internal Revenue Service (IRS) also uses the term individual retirement arrangements (also IRAs) to broadly refer to individual retirement accounts, individual retirement annuities, and other trusts and custodial accounts that act as personal savings plans with tax advantages for setting aside money for retirement.
There are many benefits to having an Individual Retirement Account, including:
- Tax benefits of IRA accounts, such as credits and a lower tax bill
- Many different ways to invest, allowing for a diversified portfolio
- Something you can count on when it’s time to retire in addition to any other retirement options you have planned on
In addition, there are many different kinds of IRA accounts, including Traditional IRA, Roth IRA, SEP-IRA, and Simple IRA. Depending on your needs and situation, there is an Individual Retirement Account that can suit every need.
Withdrawals from Traditional IRAs in retirement are taxable as ordinary income. Contributions to this type of IRA are tax-deductible. The contribution limit for traditional IRAs in 2020 and 2021 is $6,000 per year, and people 50 and older can contribute up to $7,000 per year.
According to NerdWallet, contributions to Roth IRAs are not tax-deductible, but withdrawals from Roth IRAs are tax-free, and there are no taxes on investment gains. Roth IRAs do not have required minimum distributions. Also, you can contribute to a Roth IRA at any age as long as you have earned income. However, there are income limits on who can contribute to a Roth IRA.
Also, according to NerdWallet, SEP IRAs are generally IRAs for self-employed people or small-business owners with few or no employees. Similar to traditional IRAs, the contributions are tax-deductible. Investments grow tax-deferred until retirement when distributions are taxed as income.
SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Accounts) are for small businesses with fewer than 100 employees. Similar to traditional IRAs, the contributions are tax-deductible.
Do’s and Don’ts of Individual Retirement Account Investing
As mentioned, one of the many benefits of Individual Retirement Accounts is that there are many different ways to invest in them. You can invest in:
- Mutual offerings from Wall Street
- Real estate
- Gold coins
As part of an IRA, you are not able to invest in:
- Works of art
- Most collectibles
- Many foreign investments
Gold Individual Retirement Accounts
As mentioned, one of the benefits of investing in an Individual Retirement Account is all the different ways you can invest. By having a truly diversified portfolio, you can protect yourself from any crash that might happen in a particular industry. The best protection and hedge against all of this are by investing in Gold.
A Gold IRA (or a precious metals IRA) is an Individual Retirement Account. A custodian holds gold or other precious metals in an IRS-approved depository for the IRA account owner. It is the same as an IRA, except it holds physical bullion coins or bars.
Rules for Gold IRA accounts include:
- You can transfer your existing IRA over to a Gold IRA or open a brand new one
- You are not allowed to store your gold just anywhere. An IRA custodian or trust company must hold them.
- Your gold must be stored in an IRS-approved depository, and any gold you buy will be shipped directly to them. This means you may never even meet the gold you own.
- You may liquidate at any time when you are ready to use the money
- You may only invest in American Gold Eagle coins; Canadian Gold Maple Leaf coins; American Silver Eagle coins; American Platinum Eagle coins; and gold, silver, platinum, and palladium bars (bullion) that meet applicable purity standards (gold must be 99.5% pure or better and silver bars must be 99.9% pure or better)
About Priority Gold
With all the ways you can invest in your retirement and your future, you must have a Gold IRA on the list. Priority Gold is one of the most trusted precious metals dealers in the United States with BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink. We can help you get started.
We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers. Our team is committed to helping to streamline their precious metals purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives.
We offer Free Storage for qualifying Gold & Silver IRA accounts, a fast & easy gold buying process, and smooth IRA Transfer. And gold shows up on schedule. Priority Gold guarantees the highest standards of customer service, which comes with honesty, professional conduct, and Ethical Code of Business.
For more information, visit us at prioritygold.com