To be able to retire with financial freedom you have to look over the horizon well in advance. After all, you may have to pay your way for 20 years or more after you put your working years behind you and this is going to take some significant financial resources.
There are those who don’t worry about the future because they assume that Social Security will be enough to finance their retirement years. Depending on how much you paid into the program and what you expect your expenses to be this may well be a mistake because the average Social Security payout is modest to say the least at under $1100 per month.
The bottom line is that saving money for retirement is key, and this is often done by contributing into an individual retirement account.
The two types of individual retirement accounts that are most frequently used are the traditional IRA and the Roth IRA, and the difference lies primarily in when you pay taxes.
With the traditional IRA you make deposits into the account with assets that you have earned before they are taxed by the Internal Revenue Service. You can begin making withdrawals when you are 59 1/2 years old, and you start paying income tax when you begin to take withdrawals.
The Roth IRA involves the reverse scenario. When you make the deposits you are doing so with after-tax earnings. As a result, when you start taking money out of the account there is no further taxation.
If you are interested in mapping out a plan for the future that includes individual retirement accounts, expert guidance is important. The intelligent first step is to sit down and discuss your unique situation with a licensed and experienced SC estate planning lawyer.