Individual Retirement Accounts (IRA)
An individual retirement account (IRA) is a personal savings and investment account that helps you save money for retirement. And better still, you’re doing it in a tax-advantaged way. Even if you already own a 401(k), an IRA can enhance your nest egg. Learn about our traditional, Roth, and rollover IRAs, and what they can do to help build a retirement that’s full of promise.
Traditional IRAs offer tax-deferred growth if you believe that you may be in a lower income tax bracket at retirement. By contributing money that you can deduct from your income tax return, you’ll reduce your taxable income now. When you eventually withdraw money from your IRA during retirement, you may possibly have less income. So although you’ll still be taxed on those earnings, it will likely be at a lower rate.
Roth IRAs offer tax-free growth if your current income falls within government specified limits, and you expect to be in a higher income tax bracket at retirement. You will contribute to your account now with money that you've already paid taxes on (after-tax contributions). Your earnings will grow federally tax-free, which should allow them to build faster. When it’s time to withdraw that money in retirement, you’ll typically be free from paying any taxes.