Options For Your IRA Investments
There are plenty of people out there who are unsure of the different IRA investment options available to them so let’s begin with a brief overview of some of these. That way you can see for yourself what options would best suit your own personal circumstances.
There are three options that we are going to explore here. The first is the 401(k) rollover, the second is the traditional IRA and the third is the Roth IRA.
IRA Rollover – this first option is available to those individuals who already have a 401(k) plan set up by their employer. It is also valid for any other type of pension plan that you’d want to rollover into an IRA account.
If you’re looking to get out of other types of retirement accounts and into an IRA then you’d have to request that your funds get rolled over into an IRA account in your name. You could either rollover into a traditional IRA account or a Roth IRA account.
Traditional IRA – a traditional IRA account is a tax-deferred investment set up that will allow you to invest your pretax dollars which of course earn you a better return than if you were only investing your after-tax dollars.
A traditional IRA is also tax-deductible during the year that you choose to invest your money.
Roth IRA – a Roth IRA is a different kind of retirement investment vehicle altogether. The one area where you lose out with this particular type of investment compared with a traditional IRA account is that you do not get to take advantage of the yearly tax-deductible option.
But many people consider that you make up for this by having the ability to let your investments and money grow completely tax-free. You will never have to pay taxes on any of the money all the time it is inside this particular type of IRA. For that reason Roth IRA’s are the favored IRA option for many folk.
The minimum contribution amount for a Roth IRA for anyone under the age of 50 is $5000. And if you’re older than 50 it’s $6000 for both Roth and traditional IRA investments accounts.
Which IRA Investments Option Makes The Most Sense For You?
Just because the Roth IRA is the preferred option for many others does not necessarily mean that it’s the ideal investment opportunity for you. You may have a completely different retirement strategy than most, and it may make a lot more sense to keep your money in a traditional IRA investments account to take full advantage of the tax deductions that you get while you are still contributing to this fund.
Age also plays a major factor regarding choosing a traditional IRA over a Roth IRA, or even if you want to rollover your pension plan into either one of these IRA accounts. If you are already nearing retirement age and you’ve had a traditional IRA the entire time then it would obviously make the most sense for you to stick with your current game plan. That’s assuming of course that you’ve stuck with it because it’s been working for you.
If you are a young person setting up your initial IRA then most people would probably recommend that you choose a Roth IRA. When you’re young you might not realize how important this is, but not having to pay taxes on your gains within the fund can be huge as it allows you to enjoy the benefits of compound interest.
What Other IRA Investments Should You Consider?
Another IRA investment strategy is to include gold, silver and the other precious metals in your retirement account. These commodities traditionally go up in value while the economy falters and therefore act as a hedge to protect your overall investment portfolio.
Gold has what is known as a negative correlation with stocks, bonds, the value of the dollar and the rate of inflation.
When stocks, bonds and the value of the dollar fall and when the rate of inflation goes up, the value and price of gold rises. This is why gold is seen as a safe haven in times of economic uncertainty. For more information about this please go to Why Invest In Gold?
It is because of these factors that many financial experts recommend making gold and other precious metals a part of your IRA investments portfolio.
What many people don’t realize when they hear talk of investments in gold, silver and other precious metals is that you can make these a part of your retirement plan. More information: Frequently Asked Questions About Gold IRAs
If you haven’t considered including gold and other precious metals in your retirement investment portfolio so far then you may want to consider researching into this.
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