Almost everyone can have some sort of IRA. There are Traditional & Rollover IRA's and Roth IRA's. Annual contribution limits have increased over the years, making IRA's much more attractive for saving for retirement. Individuals over age 50 can make additional "catch-up" contributions each year.
If you are not participating in an employer sponsored 401(k) plan you may contribute to a deductible Traditional IRA at a maximum of $5,500 per year or $6,500 for those over 50 years of age. Additionally, if you do participate in an employer sponsored plan and income allows you may make a non-deductible contribution to a Traditional IRA and then further transfer the contributions to a Roth IRA, making them non-taxable upon withdrawal through the use of a Roth Conversion. The Roth IRA has become a popular way to expand retirement investing for many investors because, although contributions are not tax deductible, Roth distributions can be tax free if certain conditions are met and the owner is not required to take distributions at age 70 1/2.
Also, when you change jobs, often times you have several options available to you. You can keep the assets in your old employer's plan, roll it over into an IRA or transfer it to your new employers plan (if it accepts rollover – which many do). There are many advantages and disadvantages to an IRA rollover depending on the investment options, services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and your own financial needs and goals.
But, with the various IRA options available it is important to know what your goals are and which of the options can best suit your needs. Let us assist you in determining which IRA options are appropriate for you.
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