Why Start An IRA?
IRAs encourage people to save money by offering the following advantages: • Depending on the type of IRA and your circumstances, you may be able to deduct some or all of your contributions from your current income for tax purposes. • Generally, earnings and gains in an IRA are not taxed until the money is distributed. The idea is that you will have less income and thus a lower tax when you make a withdrawal from an IRA. In some cases, earnings and gains are not taxed at all if distributed according to the rules. • The availability of emergency cash. You can always access money in an IRA, no matter what type it is, whenever you want. Thus, cash for emergencies is always available. It is not recommended that you use money in an IRA for emergency purposes unless you have exhausted all your other options. You will be charged penalties if you make a premature distribution in certain circumstances. For a full list of how you can access funds without penalty, see How To Withdraw Funds From An
