Here are 5 IRAs you should open today

An individual retirement account (IRA) is an investment account that gives you amazing tax advantages for retirement savings.

The two common types:

  • Traditional IRAs. This account allows you to invest pre-tax You’ll rollover your 401k into a traditional IRA whenever you leave a job. Currently, anyone younger than 70 ½ -years old is allowed to contribute to a traditional IRA. Once you hit that age, you are required to take out a minimum withdrawal each year that is a specific percentage of your funds.
  • Roth IRAs. This account uses your after-tax money to invest, giving you an even better deal on your investment, as you’ll also pay no taxes on any gains when you withdraw on it. There are currently no age restrictions on a Roth IRA — however, there are income restrictions.

Currently, there’s a yearly maximum investment of $6,000 to both accounts ($7,000 if you’re more than 50 years old). A Roth IRA currently has an income limit of $135,000 for single tax filers and $199,000 for joint-filing married couples. A traditional IRAs have no such limits.

However, these limits change often, so be sure to check out the IRS contribution limits page to keep updated.

Though there are advantages to both IRAs, we highly recommend you get a Roth IRA. It’s one of the best investments you can make as a young person. It’s simply the best deal we’ve found for long-term investing.

If Roth IRAs had been around in 1970 and you’d invested $10,000 in Southwest Airlines, you’d only have to pay taxes on the principal amount. When you withdrew the money 30 years later, you wouldn’t have to pay any taxes on it…

…which is good because that $10,000 would have turned into $10 MILLION.

Overall, time is your best friend when it comes to your Roth IRA. And over many, many years, that’s an amazing deal.

The Top 5 Roth IRAs

Identifying the best IRA presents several challenges, so we have done the legwork to help you see the big…

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