Simply put, if you’re employed, you can take advantage of Individual Retirement Annuities (IRAs). And, if you are not employed, but your spouse is, you can participate similarly through spousal IRAs. IRAs are tax deferred retirement plans and they are important in helping to provide a retiree with a secure financial future.
A Roth IRA is a retirement plan that permits you to withdraw accumulated earnings from your account without having to pay federal income taxes, providing certain requirements are met. You will have to pay taxes on income that you put into your Roth IRA, but from then on it grows tax deferred.
Then, when you withdraw your money at retirement, it acts as tax-free income.
A Traditional IRA from Indiana Farm Bureau Insurance allows earnings and deductible contributions to grow tax deferred. That means you don't pay income taxes on the earnings and deductible contributions of your IRA until you begin taking withdrawals (usually after you retire and are possibly in a lower tax bracket).
The maximum annual contribution is $4000.* In addition, the maximum annual contribution amount is increased by $1,000 for individuals who have turned 50 before the close of the taxable year.* You decide how much you want to contribute; and your funds are accessible at any time.**
*Based on current tax laws.
**IRS tax consequences, if applicable, still apply.
Are you a stay-at-home parent? A working spouse who is not covered by an employer-sponsored retirement plan? Or, are you just taking some time off from work?
Any of these positions may qualify you to contribute to a spousal IRA—because there is never a good time to take a break from saving for retirement.