An IRA is a good way to put money aside for retirement, and since anyone may open up an IRA account, it’s an easy way to start preparing. There are two different IRA types; the Roth and Traditional. Roth IRAs are funded by after tax dollars, and all gains from the IRA are then tax free. Traditional IRAs are funded via pretax dollars which means you have to give
Uncle Sam his share when it comes time to receive the gains. The good part of a Traditional IRA is that the contributions may be tax deductible the year of the contribution. In other words, it reduces your total taxable income for that year!
Remember, the two key concepts here are time and amount. The longer you give the money to grow, the more you will have. You need to make sure that the total from all sources is enough to live on for a long time. Life expectancies keep going up, but retirement age is still 65. You never know how long you need retirement money, and the last thing a retired person wants to do is go back to work because they have to, not just cause they want to.