IRS Retirement Plan Options: Know Your Options Before You Invest

by | Dec 31, 2021 | Financial Services


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Investing in an IRA is standard when you are trying to build wealth for retirement. However, if you are new to the investing game, you may be quite lost when it comes to discerning what you should invest in. There are several different IRA plans and IRS retirement plans up for consideration. Some of the IRA plans are tax-deferred, like their IRS retirement plans counterparts. Here are a few of the different IRA options to consider.

Traditional IRA

The most traditional IRA takes the funds you channel into it and moves the money around to diversify your investments. The money you put in goes into different investments within the IRA, and an expert investment broker is responsible for managing both the IRA account and the funds you put into it. This differs from a self-directed traditional IRA.

Self-Directed Traditional IRA

A self-directed IRA puts you in the driver seat for which investments you intend to place funds. It allows you to pick and choose the investments that you will lump together under the IRA. You have some freedom to choose and change the funding amounts and investments under your IRA account. However, there is greater risk involved when you don’t know enough about IRAs.

Roth IRA

A Roth IRA is a tax sheltered IRA. You do not pay taxes or fees on the IRA investment funds until you cash out at maturity. For people with limited funds for investment purposes and tight budgets, this IRA is ideal because your paycheck and your investments are protected against taxation and fees until your IRA matures.

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