What is an IRA?

Benefits of a traditional IRA include:

• Tax-deductible contributions: Contributions to a Traditional IRA are tax-deductible, meaning that you can reduce your taxable income by the amount of your contribution. This can help lower your tax bill in the year you make the contribution.

• Tax-deferred growth: With a Traditional IRA, your contributions and investment earnings grow tax-deferred until you withdraw the money in retirement. This can help your savings grow faster than they would in a taxable account, since you won't have to pay taxes on your earnings until you withdraw them.

• Flexibility: Traditional IRAs offer a wide range of investment options, including stocks, bonds, mutual funds, and more. This gives you the flexibility to choose investments that align with your investment goals and risk tolerance.

Benefits of a Roth IRA include:

• Tax-free withdrawals: With a Roth IRA, your contributions grow tax-free, and you won't owe any taxes on your withdrawals in retirement, as long as you follow the rules. This can be a significant advantage, particularly if you expect to be in a higher tax bracket in retirement than you are currently.

• No required minimum distributions: Unlike Traditional IRAs, which require you to take minimum distributions beginning at age 72, Roth IRAs have no required minimum distributions. This means you can let your savings continue to grow tax-free for as long as you like, giving you more flexibility in retirement.

• Flexibility: Roth IRAs offer a wide range of investment options, including stocks, bonds, mutual funds, and more. This gives you the flexibility to choose investments that align with your investment goals and risk tolerance.

• No age limit for contributions: Unlike Traditional IRAs, which do not allow contributions after age 72, Roth IRAs have no age limit for contributions. This means you can continue to contribute to your Roth IRA as long as you have earned income.

• No taxes on qualified withdrawals: In addition to tax-free withdrawals in retirement, Roth IRAs also offer tax-free withdrawals for certain qualified expenses, such as a first-time home purchase or qualified higher education expenses.

There are several benefits to doing a 401(k) rollover, which involves moving your retirement savings from an old 401(k) plan to a new one, or to an IRA. Here are some potential benefits:

• Consolidation of retirement accounts: If you've had multiple jobs over the course of your career, you may have accumulated retirement savings in multiple 401(k) plans. Consolidating these accounts through a rollover can simplify your retirement planning and make it easier to keep track of your savings.

• More investment options: Many 401(k) plans offer a limited selection of investment options, such as mutual funds and target-date funds. By rolling over to an IRA, you can access a much wider range of investment options, including stocks, bonds, and alternative investments.

• Lower fees: Some 401(k) plans may have high administrative fees or investment fees that can eat into your returns. By rolling over to an IRA, you may be able to find lower-cost investment options that can help your savings grow more quickly over time.

• Greater control: With an IRA, you have more control over your investments and can make changes to your portfolio as needed. You can also choose when to take distributions in retirement, which can help you manage your tax liability.

• Estate planning benefits: By rolling over to an IRA, you may be able to name beneficiaries for your account, which can make it easier to pass your savings on to your heirs and avoid probate.

• It's important to note that there may be some downsides to doing a 401(k) rollover, such as the potential loss of employer contributions or the risk of incurring taxes and penalties if the rollover is not done correctly. It's always a good idea to consult with a financial advisor or tax professional before making any major changes to your retirement accounts.