{"id":5125,"date":"2008-09-18T08:33:36","date_gmt":"2008-09-18T13:33:36","guid":{"rendered":"http:\/\/magic1host.com\/blog\/2008\/09\/18\/benefits-of-having-an-ira\/"},"modified":"2008-09-18T08:33:36","modified_gmt":"2008-09-18T13:33:36","slug":"benefits-of-having-an-ira","status":"publish","type":"post","link":"https:\/\/magic1host.com\/blog\/?p=5125","title":{"rendered":"?Benefits of Having an IRA"},"content":{"rendered":"
by William Blake<\/div>\n

Debt is closely tied to savings – the more you do the first, the less you have left over for the latter. Conversely, the more savings you have, the less you (usually) need or want to borrow. Since you’re paying out interest by borrowing, and (in some cases) simultaneously not getting interest by saving instead, you get a double financial whammy.<\/p>\n

For example, instead of borrowing money by using your credit<\/a> card, you could save that same amount every month until you had enough to buy the item you used the credit card to purchase. Only you can decide whether having the item today is worth paying the extra amount of money it cost in interest to own it.<\/p>\n

But when it goes beyond individual items, into the realm of saving for retirement, you have a bigger issue to consider. An IRA (Individual Retirement Account) allows you to set aside money for your later years. That has multiple benefits and a few risks.<\/p>\n

When you save that money, obviously, you are not spending it. You accumulate interest on that money saved, which compounds over time. See one of the many online calculators to get a feel for how compounding can help, for example, turn a few thousand into many thousands over 30 years. You also get a tax benefit, since by design any money put into the account represents a tax deduction.<\/p>\n

The tax benefit is that you are not taxed on the money until the future when you use it. Normally your tax rate will be much lower and you will pay less taxes on the money than if it was taxed at the time you earned it. This is not true in every case, but with the majority of people it has proven to be the case. <\/p>\n

There are many IRA options available today and the system has evolved a bit in recent years. But the basic principle is the same ??” up to $2,000 per year deposited into an account tax free. <\/p>\n

One variation, for example, is the popular Roth IRA. Federal regulations allow tax-free withdrawals as long as the contributions remain in the account for five years and you are at least 59, or it’s used for a first-time home purchase.<\/p>\n

The 401k (named after a provision in the 1978 Internal Revenue Code) is also a very popular long term savings program. Employers put tax-deferred money into an account for their employees. No income tax is paid on the funds until they are taken out of the account.<\/p>\n

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About the Author:<\/div>\n
Is credit counseling the ideal way for you to get out of debt<\/a>? It might be, but there’s no single best way for everyone. Visit the Debt Smackdown website at http:\/\/www.debtsmackdown.com for more helpful tips & advice about getting rid of your debt for good..<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Debt is closely tied to savings – the more you do the first, the less you have left over for the latter. Conversely, the more savings you have, the less you (usually) need or want to borrow. Since you’re paying out interest by borrowing, and (in some cases) simultaneously not getting interest by saving instead, you get a double financial whammy.<\/p>\n","protected":false},"author":540,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[77],"class_list":["post-5125","post","type-post","status-publish","format-standard","hentry","category-business","tag-business"],"_links":{"self":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/5125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/540"}],"replies":[{"embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5125"}],"version-history":[{"count":0,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/5125\/revisions"}],"wp:attachment":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}