IRAs & Roth IRAs in Buffalo
Two of the most popular ways to save for retirement are IRAs and Roth IRAs. The enormous tax benefits from IRAs have made them many people’s go-to method of saving for retirement. Located in Buffalo, New York and serving the greater western New York area and beyond, the Financial Guys will make it our goal to help you find the best solution to meet your retirement needs.
What are IRAs and Roth IRAs?
Traditional IRAs are investment accounts that are held by brokers or banks. While each individual’s situation may be different, money placed in IRA accounts can be put into stocks, bonds or other types of investments and the tax is typically deferred until you start to withdraw from the account when you reach the allowable age to start withdrawing. Once you reach the allowable age and you start withdrawing money out of a traditional IRA, the withdrawals are taxed as income.
A Roth IRA is very similar to a traditional IRAs except the contributions put into a Roth IRA are not tax deductible like they are with traditional IRAs and the distributions taken from it are tax free as long as they are qualified distributions.
Who can open An IRA or Roth IRA?
This is one of the things that make IRAs so great! For a traditional IRA, anyone can open one and make contributions as long as they are younger than 70 and a half and they have an income. You can also open a traditional IRA if you don’t have taxable income as long as your spouse has taxable income.
With Roth IRAs, there are income restrictions that affect who can contribute to one. If you make over the allotted amount of income, you may be able to make partial contributions depending on the amount of income you have. The Financial Guys will help you decide which option is appropriate for you depending on your unique situation and your income.
What are the benefits of IRAs and Roth IRAs?
The biggest benefits that are associated with traditional IRAs and Roth IRAs are the tax advantages. Each different type of IRA has its own tax advantages, which also depend on your specific situation. The Financial Guys will help you determine which type of IRA is right for you and which one you’ll benefit the most from. Here are some of the advantages that you may be able to qualify for:
• Traditional IRA- Tax free contributions if eligible
• Traditional IRA- Tax deferred earnings if eligible
• Traditional IRA- Begin to withdraw at age 59 ½ without penalty (standard income tax rates will apply)
• Roth IRA- Tax free distributions once you reach retirement age
• Roth and Traditional IRAs- Diversified investment options
Keep in mind that each person’s situation is different. How much you can contribute to your traditional or Roth IRA each year and the tax benefits that you will receive are going to vary based on several factors. The Financial Guys will look at each of these factors carefully to determine your suitable option.
IRAs are a great way to start saving towards retirement and it’s never too early to start planning.
To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase ($10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.
This material is not intended to replace the advice of a qualified tax or legal professional. Before making any financial commitment, consult with your tax adviser or attorney.