5 Basic Facts to Know About IRAs
An IRA is one of the best ways to secure your post-retirement life. Over 60 million taxpayers in the United States own an IRA account. The value of the national IRA account of the United States was estimated to be around 19.29 trillion US dollars in 2020. Taxpayers with an IRA get about 2–4 percent of this amount in their self-directed accounts. These assets can be in the form of bonds, mutual funds, and precious metals.
What is an IRA
IRA or Individual Retirement Account helps you save money for your retirement by investing in different kinds of tax-deferred assets. This allows a tax-free growth of the assets you decide to invest in for your account.
Types of IRA
There are three main types of IRA accounts that offer different benefits:
- Traditional IRA is where you contribute to your account by investing your deductible tax returns. The tax on this income is delayed until you withdraw the money post-retirement. The delayed tax rate will be applicable based on your tax bracket at the time of the withdrawal.
- Roth IRA is when you make contributions with your income that you’ve already paid the taxes on. This income can be withdrawn tax-free with certain conditions.
- Rollover IRA allows you to ‘rollover’ tangible assets from a retirement plan to the traditional IRA. Rollover gold 401k is an example of this type.
Other Facts to Know About IRA
Now that you know what an IRA is, how it functions, and what are its types; let’s find out some of the facts you should know about your IRA account:
The Contribution Deadline
You’re told to make your IRA contributions before the deadline, which is the 31st of December. But, you have up until the date you pay your taxes to make your deposits. If you make the contribution after the 1st of January, you will need to tell your investment company about the year the contribution’s made for.
No Limit on Rollover Amount
Most account owners deposit their IRA funds through rollover instead of direct contribution. This is because the transfer amount limit in a direct contribution ranges from 6000 to 7000 dollars. In contrast, there’s no limit for the amount rolled over to IRA from a 401k or any other authentic retirement plan.
While we recommend not touching the money stashed in your IRA account before retirement, you can make early withdrawals before turning 59 and a half. The withdrawal procedure is easy and requires you to pay a 10 percent penalty along with the tax bill based on your current tax bracket.
Precious Metals IRA Accounts
Gold IRA investing is one of the most beneficial future investments for your IRA account. Your precious metal investment will grow tax-free with tax deferrals and continue adding value to your gold IRA account.
As beneficial as Gold IRA investing is, it can be tricky to execute. This is why you need our expertise at Orion Metal Exchange.
We have 50 years of experience helping our clients invest in silver and gold and setting up their successful gold and silver IRA accounts.