If you've started thinking about your retirement, you might be wondering what steps you should take to protect your future. One of the best things you can do is invest in an individual retirement account, or IRA. IRAs are a great way to build your financial future, especially where your retirement is concerned. Before you decide against opening an IRA, read the information provided below. You'll find four reasons why opening an IRA is the right thing to do for your future.
You're Never too Young to Start
If you're just getting started in your career, you might not have started preparing for your retirement. If you're like most people, you think you can wait until you're older to start on your retirement plans. But, that's not the case. The best time to start planning for your retirement is when you're young. That way, you have plenty of time to build a substantial nest egg. This is especially true where your IRA is concerned. You might not realize this, but you're never too young to start an IRA. In fact, you can actually set up your first IRA once you have your first job.
You're Not Limited to One IRA
If you already have an IRA, you might think that you're out of luck on opening another one. Luckily, there is no limit on the number of IRAs you can have open at one time. In fact, there are several important reasons why you would want to open an additional IRA. For instance, if you already have a Roth IRA, you might want to open a traditional IRA. This would allow you to reap the benefits of a tax-free retirement account. Also, you might need to open a second IRA once your income changes, especially if your income rises above the limits for a Roth IRA.
Your IRA Can be Inherited
If you're ready to start investing in your retirement, you also need to invest in your family's future. One way to do that is through an IRA. One of the benefits of owning an IRA is that the account can be transferred to a loved one as part of your estate plan. Because of the way IRAs are set up, there's no need to go through probate, which means your loved one's will gain access to your assets much more quickly.
Your Losses May Be Protected
Finally, if you're worried about financial losses, especially in a volatile investment market, it's time to open an IRA. With an IRA, your losses may be protected through tax deductions. That means you can write-off any losses on your annual income taxes to receive a deduction.
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