What is an IRA?
At some point you will retire, and you need a plan for that retirement. And the earlier you start saving, the better off you will often be. An IRA is a great way to jump start or supplement your retirement savings while gaining tax advantages along the way.
An individual retirement account—IRA—is just that, an account to which you can add money over time. There are two main types—Traditional and Roth—each with their own specific rules and guidelines that determine which would be the right choice for you and your specific circumstances.
Either way, IRAs are a savings vehicle offering tax benefits when you invest money for your retirement. Those investments are purchased to grow over time (though like any investment, they have some risk), and eventually you can withdraw that money during retirement.
Why can a Traditional IRA be a smart choice?
Mainly this is a tax thing. The money you put into your IRA is used to purchase investments like stocks, bonds, and mutual funds that are held in the account, and those investments grow tax-deferred. This means you owe nothing on those gains as long as the money remains in the IRA.
Another benefit is that you can contribute up to $5,500 per year, on top of your 401(k) or other employer-sponsored retirement plan. And, if you leave your employer, you can often roll those retirement accounts right into your IRA. If you happen to be self-employed, or have business income outside of your job, there’s a third type—SEP IRA—that allows even higher contribution limits.
Where to start?
SoFi’s all about empowering you and your financial future. We’re ready to answer all of your questions, and provide personalized advice based on your unique financial situation and retirement goals.
All of this IRA stuff can get pretty complicated, so why not take advantage of a complimentary personalized consultation with a SoFi advisor to discuss your specific goals and objectives?
A smart addition to your retirement plan
If you want to retire at some point, it’s important to take advantage of every opportunity available to enhance your planning. IRAs can be a wise and valuable addition to your retirement plan, on top of a 401(k) or other employer-sponsored retirement account.
An IRA can decrease your overall tax burden while potentially accelerating progress toward your goals for a secure retirement. But there are key differences between Roth, Traditional and SEP IRAs, and significant complexities to consider.
SoFi is here to help you choose the best strategy based on your goals and circumstances, empowering you and your financial future.
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