Question
Why open an ira?
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16th Feb 2010 by Daniel Cross, ChFC
IRA's are a type of retirement account that allows an investor to defer taxation on earned income until distribution. If the money is withdrawn prior to turning 59 1/2, a 10% penalty tax is applied in addition to normal taxation. IRA's are useful vehicles if no 401K is available and the amount of income earned places the investor in a high tax bracket. The traditional IRA is becoming less popular as more and more people are experiencing an increase in living upon retirement age and choose the Roth IRA as their main funding vehicle due to its own unique tax rules.
IRA's are a type of retirement account that allows an investor to defer taxation on earned income until distribution. If the money is withdrawn prior to turning 59 1/2, a 10% penalty tax is applied in addition to normal taxation. IRA's are useful vehicles if no 401K is available and the amount of income earned places the investor in a high tax bracket. The traditional IRA is becoming less popular as more and more people are experiencing an increase in living upon retirement age and choose the Roth IRA as their main funding vehicle due to its own unique tax rules.
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9th Nov 2009 In Retirement
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Subjects: ira,