Checkout View Cart


   Investing Terms
   401k Plan
   403 Plan
   529 Plan
   12b 1
   ADR
   Agency Bonds
   Annuity
   Asset Management
   Bear Spread
   Bond Yield
   Bull Spread
   Call Option
   Closed End Fund
   CMO
   Commodities Broker
   Convertible Bonds
   Covered Call Option
   Current Yield
   Custodial Account
   Debit Spread
   Defined Benefit Plan
   Defined Contribution Plan
   Diagonal Spread
   Dividend
   Eurodollar
   Fixed Annuity
   Foreign Currency Option
   General Obligation Bond
   Growth Fund
   Hedge Fund
   Horizontal Spread
   Income Fund
   Independent Broker
   Index Fund
   Index Option
   IRA
   Interest Rate Option
   Life Annuity
   Limited Partnership
   Margin Account
   Married Put
   Money Market Fund
   Mortgage REIT
   Municipal Bond Investing
   Mutual Fund Investment
   No Load Fund
   Nominal Yield
   Online Stockbroker
   Online Commodity Broker
   Stock Warrant
   Option Spread
   Option Straddle
   Online Real Estate Broker
   Stock Option
   P E Ratio
   Penny Stock Investing
   Portfolio Management
   Preferred Stock Investing
   Private Placement
   Put Option
   Put Bonds
   REIT Investment
   Repo
   Revenue Bond
   Secured Bond
   Short Sell
   SEP IRA
   Subordinated Debenture
   Tax Deferred Annuity
   Treasury Bill
   Treasury Note
   Treasury Bond
   Treasury STRIP
   Trust Account
   UGMA Account
   Unit Investment Trust
   Variable Annuity
   Yield To Maturity
   Yield To Call
   Zero Coupon Bond



   Courses
   Insurance CE
   Marketing Training
   Advertising
   Contact Us
   Home

IRA Retirement Account

A personal investing account where an individual or couple (in separate accounts) can contribute money for their retirement is known as an IRA. An IRA allows for cash contributions of up to $4000 per year per individual. This contribution amount will increase in the future.

Investing in an IRA is something investors should consider if they do not have a company retirement plan or other vehicle for the future. Early withdrawals prior to age 59 1/2 are subject to a 10% penalty and the amount withdrawn is taxed as income.

Traditional IRA accounts are tax qualified, which means the contributions are tax deferred and grow tax free. When the money is drawn after retirement age, it is taxed as income.

Investments

Stocks, bonds, funds and most other negotiable securities are allowed to be purchased through a broker dealer in an IRA. These investments should be carefully chosen by you and your IRA financial planner.

Types

There are many types of IRA's including: Traditional, Education and Roth.

Rollover

An IRA rollover is when you close out the account and deposit the full proceeds to another retirement plan. This is allowed with certain restrictions. The rollover must be completed within 60 days and can only be done once a year.

Distribution

Withdrawing money from IRA is normally done after age 59 1/2. This amount should be pre-set based on your tax bracket (since you will be paying taxes on this account), and the amount of money in it. You must take your IRS minimum distribution by age 70 1/2 or a 50% penalty will be assessed for that minimum amount.

IRA investing should be done after consulting with your financial planner, asset manager or broker dealer.

SEP - Simplified Employee Pension

SEP IRA's are used by small business that wish to have a simpler solution to their employee pension needs vs. 401k accounts and alike.

An employer makes a contribution to an IRA for each employee and takes a deduction for the contribution on the investing portion. An SEP pension account is available to part time or full time employees if they meet certain requirements related to age and years employed.

Copyright 2006 American Investment Training, Inc.