Posted by Yi-Xin Jin (Lily)
IRA has been around for more than 25 years and it has gain popularity over the years. According to an article published by Employee Benefit Research Institute study Wednesday, the amount of assets in the IRA accounts today totaled 4.75 trillion which is more than any other type of retirement plan. However, most of the people who own IRA are clueless of how useful this retirement account can be. There are different kinds of IRA, Traditional, Roth and Simplified Employee Pension. Traditional IRAs consists of two kinds of plan, deductible and nondeductible. You can also take out money from your IRAs with out paying the early distribution penalty before the age of 59 ½., by using the substantially equal periodic payments (SEPP) rules. This rule is complicated but it allows the IRA owners “to withdraw a fixed amount of money for a minimum of five years or to age 59 ½ which ever comes last.”(Powell) A beneficiary form is an important element of IRA, Without a form, the account will likely go to your estate and be taxable."(Powell) Many account owners often forget to change the names of their beneficiaries after a birth, death or divorce. When making transfers between accounts, the IRA account owners should follow up diligently to make sure the money is transferred into the correct account.