IRA (Individual Retirement Account)
Question: What is an IRA (Individual Retirement Account)?
Answer: An IRA is an investment vehicle that was authorized by Congress for the purpose of helping individuals save for retirement.
Question: What are the benefits to opening an IRA account?
Answer: There are several benefits, besides saving money, to opening an IRA account that include interest buildup, special tax treatment, protection from creditors in many states against seizure of IRA accounts to satisfy judgments, and other advantages.
Question: Is there more than one type of IRA?
Answer: Yes. There is the traditional IRA, the Roth IRA, the Simple IRA, the SEP (Simplified Employee Pension Plan) IRA, and the Self-Directed IRA.
Question: Who is allowed to open an IRA account?
Answer: If you are employed, self employed, or have any other form of earned income, you may be eligible to start an IRA account.
Question: How can I set up an IRA account?
Answer: You can set up an IRA account and make your contributions through your bank, credit union, savings and loan association, or other financial institutions.
Question: Are contributions to an IRA taxable?
Answer: Whether or not the contributions to an IRA is taxable or not depends on the adjusted gross income to the of the accounts owner and how the IRA funds are maintained.
Question: Are there limits on how much an individual can contribute to an IRA?
Answer: There are limits on the contributions that an individual can put in an IRA. For the amount that you can contribute, talk to your bank or your tax consultant.
Question: Are IRA accounts regulated by governmental agencies?
Answer: IRA accounts are subject to Internal Revenue Service Codes and the Employee Retirement Income Security Act of 1974.