The benefits of the IRA account

April 07, 2015

By: Kurt A Schindler, Ph.D*

An IRA account is so much more than something you can include in your tax return. Learn its benefits and why it makes sense to consider it as part of your retirement plan.

We all want to retire but not everyone knows how and when. We define retirement as that time in life we reach both the age and length of service in a company that allow us to retire and dedicate ourselves the things we would like to do but could not while we were working. Upon retirement we hope to have enough money without working anymore – because our capital works now for you. Of course, I want to get to that magic day when I would have more time for me, and life will be much easier. The reality is that if we do not plan ahead, we cannot expect things to fall out of the sky.

The Individual Retirement Account (IRA) is a powerful tool we have at our reach if we use it well. Learn about its benefits and you’ll see why you should consider it as part of your retirement plan.

1. Deductible Taxes – This is the main reason people knows about and opens IRA accounts. Actually not all IRA accounts are tax deductibles and you should not open one merely because you want to include it in your tax return. The main benefit of the IRA must be accumulating money for your retirement plan.

2. Different types of IRA accounts, different benefits – There are a variety of options that can suit your needs. Do your research and check which one fits your needs. Access and check out the different options we have available. To maximize the overall performance of your portfolio for retirement you may combine your IRA investments with the investments you have in your other retirement plans, such as 401(k). However, you must obtain detailed information of the most convenient IRA for you and consult your tax advisor before investing because the principal is not insured with some IRAs.

3. Different terms of maturity – Generally, the longer you start investing in an IRA, the greater probability you will have a higher yield at long term. If you have many years ahead to go for your expected retirement date, consult your professional advisor to take advantage of the time factor.

4. Save for the education of your children – This is an excellent option to cover part of the cost of your children’s education and deduct the money from your tax return.

People! The time to act towards your retirement is now! Contact us and we’ll help you with information you need to open your IRA easily. You will thank me for this advice from here to some good years… upon reaching your long dreamed retirement.

Kurt A. Schindler is the director of Financial Education for Banco Popular de Puerto Rico. Schindler is a Certified Financial Planner® and has a Ph.D. in Personal Financial Planning from Kansas State University. The American Bankers Association recently honored Schindler with the George Bailey Service Award, which is given to bank employees who are not chief executive officers (CEO) and who demonstrate excellent initiative by doing high impact work and serving as an inspiration for others. It is the only prize given by the ABA to an individual as part of its Community Commitment Awards.

Popular offers different investment alternatives. Obtain detailed information to determine which one is most convenient.