An Individual Retirement Account (IRA) is a tax-advantaged account designed to help you save for retirement. There are two main types of IRA investment, Roth and Traditional, each with different advantages.

With a Roth IRA, you make https://us-southeast-1.linodeobjects.com/precious-metals-pr/rollovers.html  contributions with money you’ve already paid taxes on (after-tax) and your money may grow tax-free, with tax-free withdrawals in retirement, provided that certain conditions are met.

In a Traditional IRA investment, you make contributions with money you may be able to deduct on your tax return and any earnings potentially grow tax-deferred until you withdraw them in retirement. In either case, the tax benefits allow your savings to grow, or compound, more quickly than in a taxable brokerage account.

If you aren’t sure which one is right for you, it may help to ask yourself: Would you rather your money be taxed now, in your current tax bracket (Roth IRA)? Or would you rather your IRA contributions be taxed later, when you reach your golden years (Traditional IRA)? Your tax advisor may be able to help decide which is best for you.

IRA investment is important because financial experts estimate that you may need up to 85% of your pre-retirement income in retirement. An employer-sponsored plan might not be enough to accumulate the savings you need. Fortunately, you can contribute to both a 401(k) and an IRA. A Fidelity No-Fee IRA can help you supplement your current savings in your employer-sponsored retirement plan as well as help you take advantage of the power of compounding.