Today, many investors are beginning to realize that the responsibility for having enough retirement savings is solely up to them individually. Gone are the days of the corporate pension plan, and Social Security benefits are becoming more uncertain with each passing year.
There is good news, though, in that investors do have other options. One way that investors have been able to set aside funds for the future in a tax advantaged manner is by setting up an Individual Retirement Account, or IRA.
What is an IRA?
An IRA is type of retirement account that allows investors to save money in a tax advantaged manner. There are actually two primary types of IRA accounts. These are the traditional and the Roth.
With a traditional IRA, contributions may be tax deductible. The growth on the funds that are inside of the account is tax deferred. This means that no tax is due until the time of withdrawal – allowing funds to essentially grow at a much faster pace than if they were taxable. Because many traditional IRA account owners don’t withdraw their IRA funds until they are retired, they are typically in a lower tax bracket, so their withdrawn funds are taxed at a lower rate.
The contributions that are made to a Roth IRA account are not tax deductible. However, the growth that occurs inside of these accounts is tax free, as are the withdrawals. This means that there is no tax due when money is withdrawn from a Roth IRA – provided that the account holder is at least age 59 1/2 or older.
What is an IRA Rollover?
In funding one’s IRA account, there are several different options. These include making a direct cash deposit, transferring funds over from an existing IRA account, and / or “rolling” funds over from a qualified retirement account such as a 401(k) or 403(b) plan. When moving the assets from an employer-sponsored retirement plan into a personal IRA account, the process is referred to as an IRA rollover.
What is a Gold IRA Account?
While most IRA accounts allow investors to choose from a list of “traditional” types of investment vehicles such as stocks, bonds, and mutual funds, there are other IRAs where investors can expand their list of investable options to include gold and other precious metals. These accounts are oftentimes referred to as gold IRAs.
A gold IRA can provide numerous advantages to an investor because it allows all of the benefits of investing in gold, along with all of the tax benefits of IRA investing. Gold IRA accounts can be set up as either a traditional or a Roth.
There are many gold IRA companies that will help investors in learning what is gold IRA investing, as well as with opening and funding their accounts to best meet their specific retirement investment goals.