Prev: Withdrawing your money when you retire
Banks, brokerages, and mutual fund companies offer IRA’s. Choose the one with the products and services you want for the lowest fees.
Get the Right IRA: What Investments, Services & Advice Do You Need?
Mutual Fund Fees Are Typically Your Biggest Expense.
If you invest your IRA savings in mutual funds, the fees mutual funds charge (typically a percentage of the savings invested in the fund) vary widely. Fees can be 0.2% or less or well over 1% per year. And the fees you pay are very important.
You can contribute up to $5,500 a year, less any contributions to 401(k)s and 403(b)s, if you earn that much from work. If over 50, you can contribute an additional $1,000. If over 70½, you can’t contribute.
Before age 59 ½, withdrawals get hit with a 10% “penalty tax” except:
Beginning at age 70 ½, you must make “Required Minimum Distributions” – so the government can finally tax that money.
The contribution limits are the same as in Traditional IRAs.
Before Age 59 ½
After age 59 ½, all withdrawals are free of tax.
Here is a video from Khan Academy that explains in more detail how an IRA works:
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Employers pay a small one-time set up fee, and no ongoing plan administration fees.
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