Basics of individual retirement
IRA- Individual Retirement Accounts are the most common means for saving for
retirement next to 401(k) plans. An IRA can be made up of several components
or a single source. The two IRA types are the Roth and Traditional. A
traditional IRA is funded by pretax money so at the time that money is drawn
from the account the individual is taxed on the withdrawals. A Roth IRA is
funded by after tax money and at the time of withdrawal the account is not
subject to taxes.
Annuities- While an annuity can be part of an IRA they can also stand alone as
a retirement or investment vehicle. Annuities accept money over an extended
period or in a lump some. After a set period of time the annuity begins paying
money back. The money paid back can be arranged in several ways either
percentages or flat amounts per month or year.