Happy Labor Day! Remember, all branches are closed for the holiday!
As Americans take a break from their usual work this Labor Day, they should consider how to make their money work harder for them. One way to do this is with a Roth IRA. IRAs—Individual Retirement Arrangements—are personal accounts that may allow individuals to receive tax advantages for money they save for retirement. Roth IRAs may benefit individuals because they can save money for retirement now, even if they’re starting their first job out of school and may not have retirement in their near future.
Roth IRAs are different from traditional IRAs because tax is paid on the money when it is contributed, rather than when it’s used—so it may be a good choice for someone young or who expects to be in a higher tax bracket when they’re ready to withdraw funds. Distributions of principal and interest are tax-free, assuming the individual follows the guidelines set forth by the IRS.
Why would an individual consider a Roth IRA?
• They want to save for retirement.
• They may be leaving a company and need somewhere to place their 401(k) earnings.
• They want to save money now, even if they don’t have very much to save from each paycheck. The money they save will earn interest and grow.
• They have a goal to save, but struggle to stay motivated and not pull their funds from long-term savings, since Roth IRAs have penalties for withdrawing early.
Even individuals who are not close to retirement may want to consider saving in a Roth IRA, so their money is working for them. To learn more, visit www.bankaf.com or speak with a Bank of American Fork representative at 800-815-BANK.