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An Individual Retirement Account (IRA) is a wonderful way for people to save for their own retirement. The fact that Americans are living longer, the insecurity of the social 'security' system, and the matter of inflation, are all reasons that people should plan for ways to support themselves later in life.
An IRA allows one to save and invest money without having to pay
taxes until later - or never, depending on the type of IRA. The
effect of deferring this tax is the benefit of 'compounded growth'
on investment. Because you are not taxed until retirement, your
return on investment is able to accumulate faster, and that accumulated
interest may then also be invested.
This concept applies to each of the various IRA types, although the tax implications and contribution rules vary between the accounts. Be sure to read about each of the IRA types before deciding which is right for you.
Traditional IRA
Roth IRA
SEP IRA
Coverdell Education Savings Account
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