Back to School Offer

Get 20% of Your First Order amount back in Reward Credits!

Get 20% of Your First Orderback in Rewards

All papers examples
Get a Free E-Book! ($50 Value)
HIRE A WRITER!
Paper Types
Disciplines
Get a Free E-Book! ($50 Value)

Benefits of Investing in IRA When You Are Young, Research Paper Example

Pages: 3

Words: 709

Research Paper

IRA is an Individual Retirement Account. It is defined by the U.S law as a kind of individual retirement plan, in 26 USC § 7701 (Legal Information Institute, n.d.).  Basically, IRA is a term that applies both to an individual retirement plan and retirement arrangements. It contains a trust account or a custodial account that is established for taxpayer’s exclusive benefits, a retirement annuity, which serves as a means of purchasing an annuity contract or, in other case, the endowment contract from a particular company that deals with life insurance (IRS, 2013).  IRA is a valuable opportunity to make tax-advantaged savings and an effective savings vehicle that is path to financial security and stability. It helps to fund all retirement and even assists in taking care of your children’s needs.

Under the circumstances of “the greatest retirement crisis in American history” (Siedle, 2013), IRA will provide for financially secure retirement. Serving as a so-called “wrapper” of tax advantages, IRA (either traditional or Roth) may include mutual funds, CDs, stocks and bonds, exchange-traded funds, and annuities. IRAs may be funded from an individual’s personal contributions ; they may also be used for the purposes of holding money which rolls over from the retirement plans of qualified employees or gets transferred from some other IRA’s. Owing to its potential, IRA is especially important in the situations when the employer does not provide a retirement plan and also useful in the situations when the employer hardly matches the individual’s contributions. According to USAA (2013), IRAs are particularly important since “With the future of Social Security under scrutiny and company pensions becoming increasingly rare, an employer’s plan may not be enough to build the savings you’ll need for retirement.” (USAA, 2013).

Next, IRAs are a means of making good investment choices. For instance, when some 401 (k) plans fail to offer any guaranteed annuities or portfolios that are professionally managed, IRAs do. Fixed annuities get developed specifically for this purpose – retirement; so they can be very helpful in guaranteeing against loss through offering steady growth. They can easily be turned into a personal retirement income which will for sure last to the end of the individual’s life. Besides, an advantage of IRAs is their professionally managed portfolios. Once a person switches jobs and opts for rolling existing 401 (k) assets into his or her IRA, the latter gives freedom how the money earned by hard labor may be diversified.

Also, IRAs contain the potential for the person’s immediate tax relief. Those individuals who meet the requirements, have a chance to take an income tax deduction for contributed assets (these are traditional IRAs). As for Roth IRAs, contributions are known to be not tax-deductible. However, qualified distributions are free from taxes if they are made 5 years after the opening of a Roth IRA.   The favourable feature of Roth IRAs is the possibility to withdraw, without penalties, the contributed money, for any reason and at any time (Choose to Save, n.d.).

Once you decide to open an IRA, you should check which of them is more accessible and convenient for you. IN traditional IRAs you will not need to pay taxes on your earnings and anyone can contribute, whereas Roth IRA users should have a gross income with IRS limits and can withdraw their assets penalty-free.

Surely, it is always best to save as much as an individual can as early in his life as possible. Once you decide starting to save, choose IRA, and you will ensure your financial security 50 years from now when some social securities may even not exist!

References

Choose to Save (2013). “Why open an IRA?” Retrieved 28 June 2013 from http://www.choosetosave.org/brochures/pdf/whyopenanira.pdf.

Siedle, T. (2013). The greatest retirement crisis in American history. Retrieved 28 June 2013 from http://www.forbes.com/sites/edwardsiedle/2013/03/20/the-greatest-retirement-crisis-in-american-history/.

USAA (2013). “IRA spells tax savings – Now or later”. Retrieved June 28, 2013from

https://www.usaa.com/inet/pages/advice-retirement-iraspellstaxsavings?akredirect=true.

Legal Information Institute (n.d.) “26 USC § 408 – Individual retirement accounts.” Retrieved 28 June 2013 from http://www.law.cornell.edu/uscode/text/26/408.

Fawcett, J., & Garity, J. (2009). Chapter 1: Research and evidence-based nursing practice. In Evaluating Research for Evidence-Based Nursing, (pp. 3–20). Philadelphia, PA: F. A. Davis.

Doran, D. M., Haynes, R. B., Kushniruk, A., Straus, S., Grimshaw, J., Hall, L. M., Jedras, D. (2010). Supporting evidence-based practice for nurses through information technologies. Worldviews on Evidence-Based Nursing, 7(1), 4–15.

Time is precious

Time is precious

don’t waste it!

Get instant essay
writing help!
Get instant essay writing help!
Plagiarism-free guarantee

Plagiarism-free
guarantee

Privacy guarantee

Privacy
guarantee

Secure checkout

Secure
checkout

Money back guarantee

Money back
guarantee

Related Research Paper Samples & Examples

Job Satisfaction in Security Forces Career Field, Research Paper Example

Overview Chapter The subject of this research paper concerns the job dissatisfaction of American citizens working in security force career field. The research is based [...]

Pages: 5

Words: 1316

Research Paper

The Personal Life of the Apostle Paul, Research Paper Example

Introduction The Apostle Paul, or Saint Paul, or Paul of Tarsus, is one of the most prominent figures in the world history, one of the [...]

Pages: 17

Words: 4712

Research Paper

The Battle of Little Bighorn and General Custer’s Violation of the Characteristics of the Offense the Battle of Little Bighorn, Research Paper Example

The Battle of Little Bighorn – also known as Custer’s Last Stand – was an armed conflict that took place on June 25th and June [...]

Pages: 9

Words: 2447

Research Paper

Alternative Dispute Resolution in Contracting, Research Paper Example

Alternative dispute resolution is a notion which encompasses increasingly popular techniques and methods of conflict resolution beyond the government judicial practice. The routes of the [...]

Pages: 8

Words: 2281

Research Paper

Policy Analysis, Research Paper Example

US Criminal Justice System is a structural base created to maintain social control in the country. It is well-structured and has several components to ensure [...]

Pages: 6

Words: 1687

Research Paper

Sports Can Benefit Children, Research Paper Example

Each parent is responsible for his or her child’s well-being and happiness. By taking the responsibility for bringing up a child, parents also take the [...]

Pages: 7

Words: 1794

Research Paper

Job Satisfaction in Security Forces Career Field, Research Paper Example

Overview Chapter The subject of this research paper concerns the job dissatisfaction of American citizens working in security force career field. The research is based [...]

Pages: 5

Words: 1316

Research Paper

The Personal Life of the Apostle Paul, Research Paper Example

Introduction The Apostle Paul, or Saint Paul, or Paul of Tarsus, is one of the most prominent figures in the world history, one of the [...]

Pages: 17

Words: 4712

Research Paper

The Battle of Little Bighorn and General Custer’s Violation of the Characteristics of the Offense the Battle of Little Bighorn, Research Paper Example

The Battle of Little Bighorn – also known as Custer’s Last Stand – was an armed conflict that took place on June 25th and June [...]

Pages: 9

Words: 2447

Research Paper

Alternative Dispute Resolution in Contracting, Research Paper Example

Alternative dispute resolution is a notion which encompasses increasingly popular techniques and methods of conflict resolution beyond the government judicial practice. The routes of the [...]

Pages: 8

Words: 2281

Research Paper

Policy Analysis, Research Paper Example

US Criminal Justice System is a structural base created to maintain social control in the country. It is well-structured and has several components to ensure [...]

Pages: 6

Words: 1687

Research Paper

Sports Can Benefit Children, Research Paper Example

Each parent is responsible for his or her child’s well-being and happiness. By taking the responsibility for bringing up a child, parents also take the [...]

Pages: 7

Words: 1794

Research Paper

Get a Free E-Book ($50 in value)

Get a Free E-Book

How To Write The Best Essay Ever!

How To Write The Best Essay Ever!