Did you know that American IRA funds amount to at least one trillion dollars, and, according to the Employee Benefit Research Institute (EBRI), U.S. men and women contribute to more than 15 million active IRAs? The cost of living is higher than ever, and that reality becomes especially relevant during retirement. Living the rest of your days comfortably, and without worry, depends on decisions you make today. Make the right decisions. Start by identifying, and clarifying, the following myths about IRAs.
I Don’t Have Enough Money for an IRA
IRAs, or individual retirement arrangements, must meet IRS standards. For the most part, IRA accounts are widely available, and getting one can be as simple as talking to your bank or credit union about financing options. Forty-eight percent of Americans, however, believe that they cannot afford an IRA account. How much truth is there to that claim?
There are a number of different IRA types, including a self directed IRA account or self managed IRAs, providing Americans with options and a certain freedoms. New plans make getting an IRA simpler, and more affordable, than ever. Today, people can choose no-fee IRAs, or choose options that reduce, or sometimes even waive, down payment in favor of setting up automatic contributions.
I Have a 401(k), so I Cannot Have an IRA, Too
Contrary to popular belief, you do not have to choose an IRA or a 401(k) only. It is perfectly acceptable to contribute to more than one retirement plan. In fact, just last year, a staggering number of Americans, or up to 80%, funded an IRA account and a corporate-sponsored retirement plan. As long as you follow IRS IRA contribution limits, having more than one plan is a smart way of diversifying retirement funds, and maximizing benefits.
I Do Not Qualify For an IRA
Many Americans mistakenly believe that they do not qualify for an IRA account. Why? An alarming number of U.S. men and women insist that they do not qualify for an IRA account because they are self-employed, or because they are too old. These claims are unfounded.
Americans ages 50 and up are, in fact, given special privileges to contribute even more to their IRA plans. Currently, contributors 50 and older can sink as much as $5,500 into IRA accounts per year. Self-employed individuals, on the other hand, may want to consider self directed IRA accounts.
Regularly contributing to an IRA is a sound financial decision. Know your funding options, or even select self directed IRA accounts, to keep retirement funds plentiful, and your last days as comfortable as possible.
