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Taking The Money: Individual Retirement Account Withdrawal


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Taking The Money: Individual Retirement Account Withdrawal

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  2. 2. Taking The Money: Individual Retiremen One of the retirement resources available to an individual is an IRA. An IRA stands for an Individual Retirement Account. However, an IRA is not an automatic retirement, but one that must be set up by the individual in preparation for their retirement. Therefore, it is important to know how to set up an IRA and how to make an individual retirement account withdrawal.
  3. 3. How To Set Up A IRA First of all, it is important to remember that it is never too late to start a retirement account. One of the time-tested ways of saving for retirement is through an individual retirement account.
  4. 4. Order To Set Up An IRA In order to set up an IRA there are a few steps that need to be taken. First of all, the individual needs to determine whether they want to set up a traditional individual retirement account or a Roth individual retirement account. The basic difference between these two types of retirement accounts is whether the individual wants to pay taxes on their retirement funds prior to investment, the Roth IRA, or to wait on paying taxes until they actually begin the individual retirement account withdrawal process.
  5. 5. Primary Decision Once this primary decision has been made then the individual simply needs to determine which financial institution they wish to utilize to manage their funds. Additionally, it is important that individual retirement account contributions be invested appropriately. Some of those investment opportunities would include the use of placing the money in stocks, bonds, money markets, etc.
  6. 6. Decisions Have Been Made Once these decisions have been made, then the financial institution will gather the appropriate personal information and request funding to open the account. Also, it is important to note that there are limits as to how much can be placed into the IRA on a yearly basis. These particular limits can change from tax year to tax year and therefore it is important to keep abreast of those changes so that penalties are not incurred.
  7. 7. How To Make Individual Retirement Acco The beauty of consistently contributing to one’s IRA is that over the course of time and with the returns provided, the individual’s IRA will grow financially. Eventually the goal of having a substantial amount of money in the IRA is that eventually sufficient individual retirement account withdrawals can be made.
  8. 8. Retirement Account Withdrawals Generally these individual retirement account withdrawals can be made when the individual reaches a certain age. However, currently, when the individual reaches the age of 70 ½ they are required by tax code to receive a minimum disbursement from their IRA. This minimum disbursement is calculated by using the life expectancy of the individual owning the IRA and the beneficiary of the IRA and dividing the amount in the IRA by that number.
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