Financial Information
Why is an IRA better than something like an online bank account earning 5.25%?
Question : Why is an IRA better than something like an online bank account earning 5.25%?
How can put an IRA in on online bank account earning 5.25%? I thought they were only mutual funds or stocks?
ira account online
Best answer:
Answer by Semester at Sea Alumni
Depending on your income, you may get a tax credit on your income taxes. Retirement funds usually are protected from creditors (that is how OJ Simpson was able to maintain his lifestyle after the lawsuit from the Goldmans). A Roth IRA allows your money to grow tax free and lets you withdraw your funds tax free under certain circumstances. You can put your IRA in on online bank account earning 5.25% too.
In a traditional IRA, your money grows tax-deferred, and you get a tax deduction on the money you contribute now. With a Roth IRA, you’ll be taxes on the money you contribute now (just like money you’d contribute to an online bank account), but your earnings grow tax-free. With IRAs, there are some restrictions on withdrawing, but it’s good that way, because you’re saving for retirement, after all.
Go ahead and take advantage of the online savings account with 5.25% as well as an IRA. It’s a good idea to be saving for your future before retirement.