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There are 4 Different Types of IRAs:
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Two Advantages of an IRA:
- You may be able to deduct your contributions in whole or in part, depending on the type of IRA and your circumstances.
- Generally, amounts in your IRA, including earnings and gains, are not taxed until distributed, or in some cases, are not taxed at all if distributed according to the rules.
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~Requirements
- The trustee or custodian must be a trust company, a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.
- In the case of Traditional and Roth IRAs, except in case of rollovers, contributions must be in cash and will not be accepted by the trustee or custodian in excess of the amount in effect for the taxable year.
- The amount in your account must be fully vested (you must have a non-forfeitable right to the amount) at all times.
- Money in your account cannot be used to buy a life insurance policy.
- Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund.
- You must start receiving distributions from your Traditional IRA by April 1 of the year following the year in which you reach age 70½.
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