Saving for Retirement: The IRA

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Many people mistakenly think that the only real way to save for retirement is to invest in your company’s 401(k) plan. While a 401(k) is a great way to put aside some money for the future (especially if your employer contributes), it isn’t the only option. Anyone can save money for retirement, even those who don’t have access to a 401(k) plan. Consider an individual retirement account as a way to grow funds and receive tax benefits all at the same time. What is an IRA? It’s a way to increase your retirement savings and enjoy a more profitable future. Even if your employer does offer a 401(k) and you choose to contribute (which you should), an IRA can offer you something entirely different.

What is an IRA?

How Does An IRA Work?

An IRA definition can easily fall into two main categories, Roth and traditional. Both IRA options are a great resource for saving money for retirement, but they offer different options and eligibility differs between the two as well. There are some similarities though, including that both allow for personal contributions and can be opened and managed at most financial institutions. Here are some of the differences:

The Traditional IRA

A traditional IRA works a lot like a 401(k) employer retirement plan in that any money you contribute will be taxed when you withdraw it. The IRA can also reduce the taxable income on waged earned that same year. There are some limits and exceptions to an IRA, but the most important thing to know is that any money withdrawn before you turn 59 ½ may require you to pay an additional 10 percent tax on the withdrawal and your income taxes.

The Roth IRA

The biggest difference between a traditional and a Roth IRA is the taxes. In a Roth IRA, the funds are post tax, meaning taxes have already been paid on that money and won’t need to be paid again. Once you deposit money into the account, it accrues interest or additional investment returns, and you are able to withdraw those (along with your original funds) tax free once you hit retirement. A Roth IRA is especially appealing to younger investors who are in a lower tax bracket now, but plan on being in a higher tax bracket once they retire. By investing in a Roth IRA account now, they pay lower taxes on the money in their account.

Did you know you are given greater flexibility to choose your investments within an IRA then you are with most employer 401(k) plans? You can choose to invest your money in a wealth of different IRA options, including gold and other precious metals. The price of gold has risen greatly over the past decade, and early investors have seen large returns on their original investments. If you would like to diversify your retirement savings account and add some balance to all the paper currency you are investing in, consider gold. It typically has a see-saw effect with the value of the U.S. dollar, and when one is priced high, the other is lower and vice versa. Make sure to round out all of your investment accounts by speaking with a professional. Call the team at Regal Assets to learn more about how you can invest gold and other precious metals into your IRA account.

What are the Limitations of an IRA?

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You may still be wondering “what is an IRA?” Here is another great resource to teach you about an IRA definition. While they provide a great resource for retirement savings, there are some government regulations and restrictions that need to be adhered in order to participate. Here are just a few of the stipulations you need to be aware of:

Contribution Limitations

There are some limits based upon your age and income. For this past taxable year, 2015, most people were not allowed to invest more than $5,500, except if you are over the age of 50, in which case you are allowed to invest an additional thousand dollars, so a maximum of $6,500. This limit applies to both traditional and Roth IRA’s combined. If you make less than $5,500 (or less than $6,500 if you are over the age of 50), the maximum amount you can contribute is your income. So if you made $3,000 in 2015 that is the maximum amount you are able to contribute.

Eligibility Requirement

To be able to invest in an IRA, you need to be earning an income. For a traditional IRA, you cannot contribute any additional funds after the age of 70 ½. Roth IRA’s don’t carry a certain age restriction for contributions, but they do carry an income level requirement. If you exceed a certain income level (it differs whether you are single or married), you cannot make contributions.


There are different deduction limitations for both a traditional IRA and a Roth. While a Roth isn’t tax deductible, but what you invest in a traditional IRA can be, but it depends on whether or not you and your spouse contribute to an employer retirement plan at your place of work. If you do participate, the deduction may be limited. If you do not contribute to an employer retirement plan, typically the full amount is deductible.

How to Get Started With an IRA

Now that you know the answer to the question “what is an IRA?” you can get started. The first step is to speak with an experienced professional, especially if you are a beginner. If you want to maximize your return potential and diversify your portfolio, speak with a member of the Regal Assets team today. They can answer any questions you might have and help you get started investing gold into your IRA.

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The government has regulated the quality of gold that can be invested into an IRA, so you need to work with a reputable broker to purchase your precious metals. You will also need to work with a good custodian company that can manage and store your gold or silver. Call Regal Assets today or visit their website at to learn more.

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