Easily Save Thousands When You Take Advantage of This Retirement Account
Everyone knows they should save for retirement; that part is pretty straightforward. More importantly, though, if you're going to be saving and investing for retirement, you might as well get some tax benefits along the way. A 401(k) is by far the most popular type of retirement account, but it's not the only one. IRAs can be great options to help supplement your retirement savings.
There are two types of IRAs: traditional and Roth. With a traditional IRA, you can deduct your contributions, depending on your filing status, income, and whether you're covered by a retirement plan at work. When you take withdrawals from a traditional IRA in retirement, the money is taxed, which separates it from a Roth IRA.
With a Roth IRA, you contribute after-tax money, but any withdrawals in retirement (after age 59 1/2) are tax-free. Having the chance for your money to grow and compound tax-free can be one of the biggest blessings for your retirement savings. Using a Roth IRA can easily save you thousands in taxes.
Source Fool.com
