Tax-Advantaged Accounts for Retirement
An Individual Retirement Account (IRA) is a popular retirement plan that can be used as an effective way to supplement other long-term retirement accounts.
While your money is in an IRA, you don't pay any current income tax on the interest, dividends or capital gains earned. This means that your money can compound more quickly than in a taxable account. Through an IRA, you can invest in a variety of options – including mutual funds, individual stocks or traditional bank deposit products such as CDs.
Types of IRAs
There are two types of IRAs available for your annual contributions. A registered M&T Securities representative can help you determine which may be best for your situation.
A traditional IRA is a tax-deferred, personal retirement account that allows income earners to make annual contributions, which may be tax-deductible.DIS-225-DIS
A Roth IRA is a personal retirement account that allows qualified investors to make non-deductible annual contributions with after-tax dollars and to withdraw principal and earnings tax-free under certain conditions.
Retirement Plan Rollovers
If you are planning to retire or change jobs, you will have some decisions to make concerning the money in your retirement plan. An IRA rollover might help you consolidate different retirement plans and defer taxes.