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3 IRA Myths Debunked

A senior citizen holding IRA withdrawal amount

Planning for the future can be tough due to its uncertainty. If you’re planning to save for the long run, it’s best to set up an individual retirement account (IRA). An IRA is a saving account that offers tax advantages and helps you save for your retirement. You can put any investment in an IRA, including stocks, bonds, mutual funds, etc. You can also invest in gold and other precious metal in an IRA account, but you have to contact a gold IRA company, as not many companies offer it.

Anyone with an income can open an IRA account, however, not everyone knows much about how IRAs work. The following blog will debunk some common myths about IRAs that people generally believe in.

Myth 1: All IRA Are Same

All custodians offer the same IRA. All of them accept investing in precious metals, stocks and bond.

Fact: Every IRA Type Has Different Policies It Focuses On

There are different IRA varieties from which you can choose. The two most common ones include the Roth IRA and traditional IRAs. Both of these are the only ones that accept investment in gold and other precious metals.

An IRA offers different benefits and has different rules and regulations. In a traditional IRA, no tax is placed on the investment, but after retirement, the withdrawal amount is taxed like ordinary income. A Roth IRA works oppositely. The investments are taxed, but there is no tax placement on the withdrawal amount.

Myth 2: Once You Put the Money in an IRA Account, You Don’t Need to Touch It

After putting your investment into an IRA account, you don’t have to worry about it till retirement. After getting retirement, only then you can withdraw money.

Fact: You Have To Take Minimal Distributions Once You Go Beyond the Age Of 70

As per the traditional IRA policy, after passing the age of 70, a person has to take out minimum distributions from the IRA account. The minimum distribution amount is the minimum amount you have to withdraw each year.

Not taking the minimum distribution can lead to a 50% penalty on the minimum amount you don’t withdraw. This also applies to those individuals that are still working or employed at the age of 70 and above. However, this doesn’t apply to a Roth IRA.

Myth 3: IRA Money Can Only Be Used After Retirement

A person can only use the IRA amount after retirement. They can’t take the money out before they turn the age of 70.

Fact: You Can Take Out Money From The IRA

An IRA is made to save for retirement, but you can also use it before retirement. However, you may face a 10% penalty if the withdrawal is made before the age of 59. In the case of a Roth IRA, a person who follows the correct guidelines can withdraw earnings without facing penalties or owing taxes.

A woman calculating IRA investment on a calculator.

Do you need assistance with investing in precious metals? At Orion Metal Exchange, we can help you with investing. We are a precious metal investment company that offers gold and silver storage. We also can help you identify the best precious metals IRA for your retirement plan. Contact us here.

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