An Individual Retirement Account (IRA) is your gateway to a more flexible and powerful retirement savings strategy. Unlike employer-sponsored plans, IRAs offer you the freedom to choose from a vast array of investments. This includes stocks, bonds, mutual funds, and more, all while enjoying significant tax advantages.
But that’s not all! If you’re in the midst of a career change or embarking on a new adventure, now is the perfect time to consolidate your old 401(k) funds into a Slavic401k IRA. This move not only simplifies your financial life but also maximizes your investment potential.
Rolling your retirement funds into a Slavic401k IRA can secure your future, whether you’re between jobs or starting a new career chapter.
The Benefits of Opening an IRA
An IRA can be a great supplemental retirement account no matter where you are at in your retirement savings journey. Some benefits of opening an IRA include:
- It’s Easy to Set Up: Because IRAs are individually owned, virtually anyone can open an account and start depositing funds. IRAs are often a financial destination to rollover a 401(k) from a previous employer. No matter what your need may be, SlavicIRA provides a simple IRA solution to help meet your financial goals. Click here to learn more or to open an account.
- Withdraw Flexibility: You can withdraw your contributions (but not earnings) at any time without penalties or taxes. This provides a level of flexibility that can be very useful in managing your finances.
- Tax Deductions: Once the account is established, you can continue to deposit and manage funds. All Roth IRA contributions are made with after-tax dollars. This means that the taxes can be deducted from your income at the time of deposit rather than at distribution. Traditional IRAs allow pre-tax contributions, meaning that the money is taxed upon withdrawal instead of a deposit.
- Tax-Free Growth: One of the biggest advantages is that your investments grow tax-free. Since contributions are made with after-tax dollars, you won’t owe taxes on the earnings when you withdraw them in retirement.
- No Required Minimum Distributions (RMDs): Unlike traditional IRAs, Roth IRAs do not require you to take minimum distributions starting at age 73. This allows your money to continue growing tax-free for as long as you want.
- Tax Diversification: Having both pre-tax (like a traditional 401(k) and post-tax (like a Roth IRA) retirement accounts can provide tax diversification. This gives you more flexibility in managing your tax liability in retirement.
Read our blog for more in depth information on the differences between IRAs and 401(k) plans. Now that you know the main benefits of enrolling in an IRA, learn about your options below.
Traditional IRA
A Traditional IRA allows participants to make pre-tax contributions that may be fully or partially deductible on a tax return. This depends on annual income and filing status.
Every year, the Internal Revenue Service (IRS) determines a maximum contribution amount for Traditional IRA plans. While the maximum varies from year to year, participants can utilize a Traditional IRA to roll over funds from a previous employer’s 401(k) plan. They can also use it to have additional retirement savings outside of an employer-sponsored 401(k).
Because a Traditional IRA is a retirement account, there are rules and regulations for withdrawals and required minimum distributions. For example, if you withdraw funds from the account before the age of 59½, you will pay a hefty 10% early-withdrawal penalty, along with taxes for the funds unless you qualify for an exception. View the full list of the exceptions from the IRS.
Roth IRA
Another option is a Roth IRA. Though it is similar in structure to a Traditional IRA, a Roth IRA provides better tax benefits and tax-free growth for accounts. For example, because funds are taxed before you deposit them into a Roth IRA, anything you deposit and investments you earn money on will not be taxed when you withdraw them in retirement.
In addition, the Roth IRA doesn’t have a required minimum distribution, meaning that participants are not required to withdraw money when they reach a certain age. Learn more about the tax benefits from Investopedia.
Similar to a Traditional IRA, Roth IRAs also has rules and regulations determined by the IRS. If you choose to withdraw funds from a Roth IRA earlier than age of 59½, you will be subject to taxes and penalty fees, unless you qualify for an exception, such as using the funds to purchase your first home or need money for the birth or adoption of a child. You can learn more about exceptions to the penalty and fee structure on Nerdwallet.
Get Started With a Slavic401k IRA
Embarking on a new career or worried about 401(k) money left behind? Don’t let your retirement savings fall behind! Rolling over your 401(k) to a Slavic401k IRA is a powerful way to keep your nest egg growing and secure your financial future. With a Slavic401k IRA, you gain access to a wide range of investment options, tax advantages, and the flexibility to manage your retirement savings on your terms.
To learn more about IRAs or to open an account, visit www.SlavicIRA.com.
