What Women Need to Know About IRA’s

The term IRA stands for an Individual Retirement Account. It is an essential account for women to open. There are two types of IRA’s:

1. Traditional IRA

2. Roth IRA

The main difference between the two is the Traditional IRA gives you the opportunity to take a tax deduction off your annual income while the ROTH does not. Depending on you income level, you may be able to deduct your entire IRA contribution. (See first chart below). Your income level also dictates which account you are eligible to open, (see second flowchart). Finally, the third flowchart lets you know if you can open both types of IRAs. You can contribute up to a total of $6000 per year or $7000 if you are 50 or older. Once you decide which type of IRA to open and contribute to, be sure to invest your contribution into a quality index or mutual fund. Do NOT leave your contribution sitting in cash.

Traditional IRA-How much can you deduct?

Note: MAGI stands for Modified Adjusted Gross Income.

ROTH IRA- Are you eligible?

Note: MAGI stands for Modified Adjusted Gross Income.

To which IRA should you contribute?

For help with setting up your IRA or in choosing the right investment for your IRA, please contact me for an initial free consultation.