Sunday, December 4, 2016

IRAs & CDs

I learned from investopedia.com that IRAs stand for Individual Retirement Account which basically means a savings account with big tax breaks, making it an ideal way to stock away cash for your retirement and is just a way to keep your stocks, bonds, and mutual funds, and other assets. 

On the other hand CDs are not what you think it is just a certificate of deposit, which is a special type of interest-bearing account, a way to earn interest on your money, that you can open at financial institutions such as banks, credit unions, and savings and loan associations. CDs are a common alternative to a standard savings account. 
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2 comments:

  1. ReindeerDecember 5, 2016 at 7:12 PM

    Source: https://trendshare.org/how-to-invest/when-should-you-open-a-roth-ira
    In addition, I learned from this site that a Roth IRA is a retirement account with some tax advantages. In simpler words, you pay taxes on the money you invest into your Roth IRA and pay no taxes on the money you take out of it. The main benefit of a Roth IRA is that you pay taxes now to avoid them in the future. This is useful if your current tax rate is lower than your predicted tax rate.

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  2. UnknownDecember 12, 2016 at 8:35 AM

    Reindeer, you are correct about the Roth IRA taxing you when you are younger and earning money. When you are retired and are no longer earning money, or you become too ill to earn money, the Roth IRA allows you to have money tax free at that time.

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