Traditional and Roth IRA: Who Qualifies and What You Get
Learn how these retirement accounts allow you to grow your savings with tax advantages based on your annual income.
These retirement accounts allow you to set aside money for the future while receiving specific tax advantages.
Who it's for
You qualify for these accounts if you have earned income.
What you get
You can grow your savings with tax-advantaged benefits. Depending on the type of account you choose, your investments can grow in a way that is either tax-deferred or tax-free. There is a set limit on how much you can contribute each year.
What it costs you
This is a self-directed investment, meaning you are responsible for choosing how your money is invested. To get started, you will need to take the time to open a brokerage account.
The catch to know
If you choose a Roth IRA, there are income limits. If you earn above a certain amount, you may be disqualified from contributing to this specific type of account.
How to apply
- Decide whether a Traditional or Roth structure best fits your tax needs.
- Select a financial institution or brokerage to host your account.
- Open the account and set up your contributions.
- Choose the specific investments you want to hold within the account.