Small Business4u

Q.     What is an IRA?

A.      An IRA is an INDIVIDUAL RETIREMENT ACCOUNT.  An IRA is a personal savings and investment plan that provides substantial tax advantages to individuals saving money for long term retirement purposes.

Q.    How does an IRA work?

A.    You invest money into an IRA up to the allowable amounts under tax law (consult your financial advisor for consumer limitations).  These investments are termed “contributions”.  In most instances tax deductions are available each year in which funds are contributed.  All contributions as well as earnings and gains accumulate tax free until you withdraw money from the account, therefore allowing you to generate substantial additional earnings.  To avoid any unnecessary taxation of the value of your IRA, distributions should never be taken before the age of 59 ½.  In addition the government can tax your IRA no later than April 1^st of the following date that you attain age 70 ½.

Q.    How many different types of IRA’s are available?

A.    There are five. 

1.      Traditional IRA

2.      Education IRA

3.      SEP IRA

4.      Simple IRA

5.      Roth

Q.    Who is eligible to open an IRA?

A.      Any individual can make contributions to a traditional IRA as long as you or your spouse have received taxable earned compensation during the year and were not over the age of 70 ½ . (Considering the strong differences between IRA’s you should always consult your financial advisor for the strategy that will be best for you.

Q.    What are the contribution limits to IRA’s?

A.    It all depends on which type of IRA you select.  Maximum contributions can typically be made through the avenue of a SEP IRA and traditionally the lower contribution amounts would be made through a Roth IRA. In addition after 2006 most IRA’s were set to be indexed to inflation.  Meaning limits will continue to increase for years to come/

I hope you found this information informative.  More in a later blog.

At the cost of you not liking what I’m writing, let me first say that if you’re on this blog, you believe in individualism and capitalism.  So on the eve of this election, I felt compelled to write to all of you regarding the fact that whatever your politics are, the election has given a welcome to socialism.  Those of you who have your own business or are starting one, would be naive if you are not concerned about the coming 4 years.  Free speech is at stake and therefore the internet is at stake.  Taxes may be going up and the economy most certainly will continue to sag.  I will be writing more about this in the next few days, but if there was ever a time to obtain extra income it’s now.  You need to escalate your independence while you still can.  Start pushing your business and working harder.  Money is the measuring stick of your success in this, not feeling good.  So let’s get going.  I will be putting up my new website in the next week and will be offering some great podcasts to get you going.  More later.  L