If you are looking for information on IRA investing and what to invest in, you need to read this article. When starting out as a new investor, the slick investor should be focusing on limiting the risk and maximizing returns. To maximize returns, a slick investor should look to invest in an index fund to produce slick income. Why is IRA investing a potential slick income idea? IRA is an individual retirement account that anyone can open to take advantage of the tax benefits and returns it offers to investors.
Bankrate’s article here explain the basic between a Traditional IRA vs Roth IRA.
Roth IRA contributions are funded with after-tax earnings. However, earnings grow tax-free and can be withdrawn tax-free, too, as long as the account is open for 5 years and you’re age 59 1/2 or older at the time of distribution.
With a traditional IRA, you may be able to claim a full income-tax deduction for your contributions, as long as you don’t have access to a retirement plan at work, such as a 401(k). Single filers who do have access to such a plan can take a full deduction if they earn $61,000 or less, or a partial deduction up to $71,000 in 2016. The income limits are trickier for married couples filing jointly. If you have access to a plan, the limits are $98,000 to $118,000; if your spouse has access to a plan but you do not, the limits are $184,000 to $194,000 for joint filers. Remember: If your employer does not offer a retirement plan, you can get the full tax deduction for traditional IRA contributions regardless of your income.
How is opening an IRA account and investing make this a slick income idea? Let’s take a look at the math.
If you invested $5500 each year for 10 years. Your potential total returns would have been $107,378 based on an average return of 10% each year. Had you invested in a dividend stock with a 5% yield, your quarterly income could be potentially $1342. Talk about generating easy income!
Opening an IRA and investing in an IRA is not a secret. Anyone can research about it and see the great potential benefits it has to offer. Don’t waste another day and go start today investing in an IRA account!