Topic: retired, starting out, baby boomersWho is affected: CONSUMERS AT EVERY STAGE OF LIFEDEGREE OF DIFFICULTY: ModerateWhat you'll need: Adjusted gross income of less than $116,000 (or $169,000 for couples filing jointly); money to save.What you need to knowAn individual retirement account is a place to put money away so that it can grow tax-free over a period of years. It's the compounding interest that enables you to retire comfortably in the end. The more time you allow for compounding, the bigger the sum grows.As of 2008, IRAs allow you contribute up to $5,000 per year ($6,000 if you're over 50). When choosing an IRA, you must decide between a traditional IRA and a Roth IRA. Each type offers its own advantages and disadvantages.To be eligible to make tax-deductible contributions to an IRA, you cannot make more than $114,000 a year ($166,000 for married couples filing jointly).You can start an IRA at many banks and brokerages -- in person or online. If you need help, consider hiring a Certified Financial Planner.Step-by-stepDo you know what it takes to work towards a secure retirement? Use this calculator to help you create your retirement plan.Current ageAge of retirement Household income Retirement savings GoRelated linksTools & resourcesTipsThe magic of compoundingRetirement vehiclesTraditional IRA vs. Roth IRAInvesting: a universe of optionsRetirement moves5 steps for figuring our your numberRetirement: Why you need to saveJuggling retirement when buried in debtRetirement income calculatorFind the best IRA ratesRoth IRA rulesFind IRA CDs by stateLife expectancy calculatorRoth IRA conversion strategies to considerIRA minimum withdrawal calculator toolRetirement planning checklistStart your IRA as early as you can to get the greatest amount of return through compound interest. When you are younger, put your money into riskier investments; as you get older, move to more secure investments like bonds or money market funds. advertisementRelated Links:Retirement planning: $2.5 million goalSave for a down payment with an IRAHit savings bond buying limit? Try TIPSRelated Articles:Tap 401(k) for expenses?MLPs: an energy play6 excuses for not saving
As of 2008, IRAs allow you contribute up to $5,000 per year ($6,000 if you're over 50). When choosing an IRA, you must decide between a traditional IRA and a Roth IRA. Each type offers its own advantages and disadvantages.
To be eligible to make tax-deductible contributions to an IRA, you cannot make more than $114,000 a year ($166,000 for married couples filing jointly).
You can start an IRA at many banks and brokerages -- in person or online. If you need help, consider hiring a Certified Financial Planner.
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A new report by the Government Accounting Office urges Congress and the IRS to crack down on over-sized IRAs.
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