Understanding Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs) are investment vehicles designed to help individuals save for retirement. IRAs offer tax advantages that can help your savings grow over time. There are several types of IRAs, including Traditional IRAs and Roth IRAs, each with its own set of rules and benefits.

With a Traditional IRA, contributions may be tax-deductible, and the investments grow tax-deferred until withdrawal. However, withdrawals in retirement are taxed as ordinary income. In contrast, contributions to a Roth IRA are made with after-tax dollars, but qualified withdrawals are tax-free.

Choosing the right type of IRA depends on your financial situation and retirement goals. Consulting with a financial advisor can help you make an informed decision that aligns with your long-term plans.