What to Know About Your IRA

The “I” in IRA stands for individual and is significant, as you have the ability to customize your deposits, take withdrawals when you want, and you are responsible for paying taxes on distributions.  Below are a few features of IRAs that will help you get the most out of your contributions:

• Contribute to more than one IRA. Contribute to as many IRAs as you would like, but the total deposited in all IRAs is limited to the annual maximum amount.
• All regular IRA contributions must me in cash. This limitation does not apply to the distribution of securities that are rolled over.
• IRA losses may be deductible. An advantage of an IRA account is the ability to defer taxes on gains and investment income.
• Control your required minimum distributions. Traditional IRA owners must begin taking required minimum distributions by April 1 of the year after they turn 70.5 years old.  The amount is based on the balance of the account on December 31 of the previous year and the owner’s life expectancy.
• No reason needed to transfer or roll over your IRA. If you decide to maintain the same type of IRA account with a different company, you can move the assets as a transfer or a rollover.
• IRAs can be annuities. Your annuity can operate under the same rules as an IRA, if the funding is an Individual Retirement Annuity.  Annuity policies were designed to provide retirement income for life. 

See Stephanie Powers, 11 Things You May Not Know About Your IRA, Investopedia.