Whether you want to travel, move to a warmer climate or invest in a hobby, you have dreams for retirement. Whatever they might be, experts recommend saving 10 to 15 percent of your annual income to help you achieve them. An employer-sponsored retirement savings plan, such as a 401(k), is a great start for planning for your future, but it might not be enough to accumulate the savings you will need.
An individual retirement account (IRA) can complement your employer-sponsored retirement savings plan. An IRA is a personal retirement savings plan that offers specific tax benefits.
Two Types of IRAs
There are two types of IRAs: Traditional IRAs and Roth IRAs. With both, you can open an account at any time and make annual contributions of up to $5,500. Taxpayers age 50 and older can make additional “catch-up” contributions. Although the accounts are similar, there is one major difference to be aware of before selecting a plan.
1. Traditional IRAs allow your investment earnings to grow tax-deferred until withdrawn.
2. Roth IRAs are taxed at time of contribution, but earnings can be withdrawn tax-free.
At Busey, our team of professionals can help you determine which IRA is best for your savings strategy. Whether retirement is approaching or many years away, we can develop a strategy to meet your unique needs. Contact us, call 1.800.67 l Busey or Visit any Busey location today.
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