How Does an Individual Retirement Account Work?

Save
Next Video:
How Does Social Security Work?....5

An individual retirement account, or IRA, allows individuals to set aside money tax free in order to save for retirement. Visit the IRS Web site for specific rules and regulations related to IRAs with information from a registered financial consultant in this free video on retirement.

Part of the Video Series: Money Management & Personal Finance
Promoted By Zergnet

Comments

Video Transcript

This is financial adviser Patrick Munro talking about how does an individual retirement account work? Basically, an individual retirement account is just that -- it's money that is set aside under IRS guidelines for the benefit of the plan holder. And if this is you, this is called qualified money. Basically, you're allowed to be payroll deducted for your funds to be placed into an IRA or, most notably, a 401k while you're working. If you're a teacher, it could be a 403b or a 457 deferred account comp plan. These numbers come from IRS rules and regulations, and to know more about these various qualified plans, you should go to irs.gov and see what your rights are to participate in these plans. If you're self-employed, you can also participate in the plans by having a SEP IRA. S-E-P stands for self-employed plan. And knowledge is power when it comes to these accounts. They allow you to accumulate money in a taxed deferred basis for your future years when you have less money or no income. This is Patrick Munro talking about how do individual retirement accounts work?

Featured

Related Searches

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!