An individual retirement account is an account in which individuals can deposit funds to save and grow their money for retirement. IRAs are one of several retirement account options that include 401ks and Roth IRAs. IRAs, sometimes referred to as traditional IRAs, allow you to make tax-free deposits now and pay taxes upon withdrawal down the line when you retirement. This a good way to go if you expect to be in a lower tax bracket upon retirement. Traditional IRAs require you to begin taking required minimum distributions at age 70 ½.
If your employer offers a 401k match, start with that. Next, compare IRAs with other options and choose your next step.
If you are a young adult, you might not be thinking about retirement. You might feel you have plenty of time to plan. But keep in mind that the years go by quickly, and before you know it, retirement will be right around the corner.
