Everything You've Always Wanted To Know About IRAs
The Individual Retirement Account (IRA) was introduced in 1974 with the passage of the Employee Retirement Income Security Act (ERISA). According to the Investment Company Institute, IRA investment to date is well in excess of 3 trillion dollars (representing approximately one-fourth of all retirement assets in the United States). In 1997, Congress created the Roth IRA for individuals of earned incomes below certain threshold amounts. In this article, we explore the traditional IRA and the Roth IRA, including the benefits and limitations of each, along with a discussion about the possible utility of converting a traditional IRA to a Roth IRA. Additionally, this article discusses the possible selection criteria of advisers for IRAs. Lastly, this article issues a caveat to investors about IRA beneficiary designations and the possible tax consequences of same.