If you’ve been setting money aside for retirement, that’s a considerable step in the right direction. But from a tax standpoint, it’s especially important to think about where you’re putting those dollars.
Individual Retirement Accounts (IRAs) are one type of savings plan many people rely on to accumulate a comfortable nest egg. As long as you’re a compensated worker, you can choose from a variety of IRA plan options, each with its own set of tax pros and cons, depending on your current circumstances.
To help you understand the significant distinctions between the different forms of IRAs, it’s best to sit down with a tax professional trained in the finer points of financial planning. He or she can help you put together a strategy for your future retirement, including whether you should be investing in traditional IRAs, Roth IRAs, or a combination of both.
The closer you are to retirement, the more you should be looking into a Roth IRA. Unlike traditional IRAs, distributions from Roth IRAs are completely tax-free in certain situations. That’s just one reason why Roth IRAs are such an effective way to save as you near retirement age.
For any questions you have about IRA planning for retirement, turn to the knowledgeable tax specialists at Taxation Solutions, Inc. There’s a lot to know when it comes to taxes and penalties affecting your IRAs, and we can help in Orlando and beyond.