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Do You Know What an Individual Retirement Account Is?

Aug 2, 2008
The Individual Retirement Account (IRA) is no more than an plan to put money into retirement. It is very important to pay attention to and understand IRA's rules because they are different from other investment plans, in order to avoid confusion.

There are specialists you can turn to who are able to make these rules clearer to you, and explain you the basics. The IRA, SEP IRAS are some of the retirement accounts, and you can always consult professionals who can advise you which is the most suitable plan for your future needs and expectations. Everything will be much better if you start researching on this area and planning as soon as you can.

Important Sections On Individual Retirement Accounts

1. You can skip all taxes as long as you do not take out the money until the agreed time, respecting the seven exceptions that appear in the rules

2. The time to withdraw the money is the age of 59 1/2 and 70 1/2. The money can be taken out of the account in its entirety, or in the amount chosen by the holder, with no taxes being applied to the accrued amounts.

3. The amount in the account will be distributed as soon as the holder reaches the age of 70. This is done according to the life expectancy, so the minimum payment will be calculated according ton single or double life expectancy.

4. The distribution is done on double life expectancy when there is a beneficiary, but if there is no beneficiary, single life expectancy will be considered to make the calculation.

5. When the beneficiary is the person the account holder is married to, joint life expectancy is used, but if it is not the spouse, and he or she is ten years younger, an expert is required to assist the owner in the life expectancy recalculation.

6. It is a good thing to turn to the specialist if you feel that the retirement account data, rules, withdrawals and other aspects of the account are not very clear to you. The professional can give you a hand to find the answer to any important questions you may have.

It is important to start planning for your retirement account. There is no such thing as too early to plan. Some people start planning from the time they start working. The earlier you understand how your retirement account works and start planning, the better it is for you.
About the Author
Cindy Heller is a professional writer. To learn more about retirement account, please visit home retirement plan.
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