An IRA is an Individual Retirement Account, or Individual Retirement Arrangement. Opening one of these accounts can help with your retirement savings plan.
Keep reading to learn about the benefits of IRAs and determine if this is a good retirement savings option for you and your future.
An IRA is a tax-advantaged retirement savings plan used to save money for retirement. Depending on the type of IRA you choose, you will be able to receive different tax benefits.
There is generally no age restriction on opening an IRA, however, you must have an income to open and contribute to one.
Below is a list of the most common IRAs:
With a Traditional IRA, contributions may be tax-deductible, but you’ll have to pay taxes when you make withdrawals. There is a Required Minimum Distribution (RMD) at age 70 ½, but you can begin making withdrawals at 59 ½. If you withdraw funds before this date, you will be charged an IRS tax penalty unless an exception applies.
A Roth IRA is also designed for individuals looking to save for retirement, but works differently than a Traditional IRA. Contributions are not tax-deductible, but qualified withdrawals are tax-free.
An SEP (Simplified Employee Pension) is a retirement savings option for someone who is self-employed or owns a small business.
To be eligible for an SEP, you must be 21, you must have either worked for your employer or owned your own business for three out of the last five years and you must have received at least $600 in compensation from your employer during the year.
A SIMPLE (Savings Inventive Match Plans for Employees) IRA is another savings option for individuals and small business owners.
A SIMPLE IRA plan allows employees and employers to contribute to Traditional IRAs set up for employees. This is an ideal setup for small employers not currently sponsoring a retirement plan.
Consider these factors before choosing an IRA:
Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA.
Synchrony Bank has many award-winning savings products, including IRAs. Our products have competitive rates+ and easy online access to make it easy to bank on your terms.
Click here to open an IRA account with Synchrony Bank or call 1-844-345-5789 to learn more about what an IRA can mean for you.
+National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 11/01/2016. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. Money Market Account Rates: Average APYs are based on Money Market Accounts of $10,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of 05/24/2018.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.