What is an IRA?Boiled down to its essential components, an IRA is a personal retirement savings plan that can usually be funded monthly or annually.
You have many IRA optionsDepending on your taxable income and your retirement plans, there's an IRA for you. While there are several, the two main options are traditional and Roth IRAs.
Traditional IRAs are perfect for the investor wishing to think forward with pre-tax dollars. And traditional IRA contributions may be tax deductible (see a tax consultant). Of course, there will be some taxes due when you begin to withdraw from your IRA at retirement.
Roth IRAs use after-tax dollars to help you invest in the future. Any returns made from a Roth IRA are yours to keep with no tax implications. Roth IRA contributions are not tax deductible.
The following table compares the two accounts:
|Type of IRA||Who can contribute?||How much can I contribute?||What are the tax advantages?|
|Roth IRA||Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation), with the following modified adjusted gross income from the federal tax form:
Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation)
Anyone who has received a distribution from a qualified retirement plan and decides to roll over the proceeds of the plan into an IRA
Solidarity offers both IRA Savings accounts and IRA Certificates.