For September, I’m going to focus on some financial education. Even though April is National Financial Literacy Month, I would like to take September to focus on the IRA. Each week, I’ll cover a specific type of IRA and highlight the aspects of that specific type of IRA. Did you even know that there are different types of IRAs? So, what exactly is an IRA?
IRA stands for Individual Retirement Account. IRAs are held at the individual level and not jointly. That means that you can have an IRA and your spouse can have an IRA, but you and your spouse will not have a joint IRA. That is, no co-ownership of a single account; each individual needs their own account.
There are several types of IRAs, but this month’s blog posts will focus on the most common types: the traditional IRA, Roth IRA, SEP IRA, and SIMPLE IRA. The IRA itself is not an investment, it’s an account type and you make investments within the account. At their most basic, IRAs share some common features: individuals can set aside personal savings from earned income, each IRA usually provides tax advantages in its own way, there are spousal IRAs for non-working spouses, and IRAs may be protected from creditors in bankruptcy proceedings to varying degrees. But as with all things investing and governed by federal law and the US tax code, things aren’t always simple. You’ll need to check the fine print and make sure the IRA type you are selecting is the best fit for you and your goals.
Next week, we’ll start with the traditional IRA. Be sure to check back each Tuesday and by the end of September you’ll be up to speed on your IRA types and how they function. Keep in mind that all investing involves risk, and you should always seek help if you are not sure about what you are doing. As an independent Certified Financial Planner™, I can help you. No matter where you are in life, a CFP® professional can help you create a financial plan for today and tomorrow. #LetsMakeAPlan #CFPPro #talktometuesday #Hireaplanner #RothIRA #fees #IRA #SEPIRA #SIMPLEIRA