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Understanding your options to save for retirement can be daunting. The following article gives basic information about the different types of individual retirement accounts (IRAs) to help you prepare for your financial future.

Invest in an IRA to build your savings and get tax benefits

Provided by Charles Schwab 

An IRA is an easy way to save for retirement. You get to choose the investments you want, your earnings can grow tax-deferred and withdrawals you take at retirement may be tax-free. Select your IRA from the list below or use the Schwab IRA Analyzer to help you decide.

Traditional IRA

A traditional IRA is a great way to build your retirement nest egg while enjoying tax benefits. You won’t pay tax on your earnings until you make withdrawals, and your contributions may be tax-deductible. This could be the right choice for you if you are under 70 ½ and have earned income.

Roth IRA

With a Roth IRA, your contributions aren’t tax-deductible- but your earnings grow tax-deferred and withdrawals can be made tax-free. Unlike a traditional IRA, you don’t have to make annual withdrawals at a certain age. A Roth IRA could be the right choice for you if you expect to be in a higher tax bracket in the future.

Rollover IRA

If you have assets in an old employer-sponsored retirement plan, it’s easy to move them into a Schwab Rollover IRA. You keep the tax benefits and get to choose how your money is invested. This could be the right choice for you if you’ve changed jobs or retired.

Inherited IRA

If you’re the beneficiary of an IRA, opening an inherited IRA will preserve the tax-deferred status of the account. This could be the right choice for you if you don’t have an immediate need for the cash and you want to avoid taxes that would be due if you were to take the assets as a lump sum.

Custodial IRA

A custodial IRA makes it possible to set up a retirement account for a minor so that he or she can benefit from tax-free or tax-deferred growth. Custodial IRAs require that an adult be named as custodian of the account until the minor reaches the age when he or she can take control of the assets. This could be the right choice for you if you’re the parent of a child under 18 who has earned income.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.