The Retirement and IRA 101 By Jeanette Pollock In planning retirement, thousands have done so successfully through an IRA, which stands for individual retirement account. The IRA is especially helpful as a retirement savings tool for those who don’t have an employer providing a 401(k) plan or the less prevalent employer-paid pension plans. But knowing the ins and outs of retirement IRAs is crucial to getting the most financial retirement benefit from them. Here is some essential information on an IRA for retirement planning. There are two choices in IRA types – the traditional IRA plan or the Roth IRA. With the traditional plan all the interest, capital gains and dividends that accumulate are tax deferred until such time as the money is withdrawn by the owner for retirement funds. The Roth IRA, in contrast, provides tax free interest, capital gains and dividends as long as the requirements are met. With the traditional IRA, the retirement planner has an individual savings plan. This is true of Roth IRA as well. Where it differs is that withdrawals can me made without any penalty once the owner is 59 ½ years old. She or he must begin withdrawing money from the IRA retirement fund once she is 70 ½ years old. The Roth IRA does not allow the owner to claim tax deductions on the contributions and does not penalize for withdrawals after 59 ½ years of age, but only as long as the account has been active for five years. Unlike the traditional IRA, the Roth retirement plan allows for contributions, and does not require withdrawal, after age 70 1/2. Jeanette Pollock is a freelance author and website owner of retirementdotcom.com. Visit Jeanette's site to learn more about retirement planning and IRA. Article Source: http://EzineArticles.com/?expert=Jeanette_Pollock

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