Whatever your time horizon for retirement, the time to start saving is now. With life expectancies and inflation rising, and the liklihood of Social Security benefits declining, you may find that you need to save more aggressively than you had projected.

The Individual Retirement Account (IRA) is probably the most widely known retirement savings option. It affords you the ability to maximize your retirement savings while minimizing your taxes. It also allows you to invest your contributions in a variety of investments available through your IRA provider. Your provider then acts as the custodian of your account, investing the money as you instruct and providing updates on your account value.

To be eligible to contribute to an IRA, you must earn income, and you can’t contribute more than you earn. You are no longer able to contribute the year you reach age 70½ or after reaching age 70½, even though you may have earned income. If you are divorced, however, you can count alimony as earned income, and non-earning spouses aren’t subject to the earned-income requirement and can set up a spousal IRA. If you and your spouse both earn income, each of you may contribute to your own IRA. In addition, you may contribute to an IRA even if you are also enrolled in another kind of retirement-savings plan through your employer.

A Traditional IRA is an individual retirement savings arrangement governed by Internal Revenue Code Section 408(a). Traditional IRA accounts are funded with deductible and/or non-deductible contributions based on your adjusted gross income. Participation in an employer-sponsored qualified retirement plan may also impact the deductibility of your contribution.

Traditional IRA plans are best suited for individuals who want to save for retirement on a tax-deferred basis or for individuals in high tax brackets who need a tax deduction. IRAs in combination with an employee-sponsored retirement 401(k) create a substantial platform for retirement savings.

The Roth IRA is an individual retirement savings arrangement funded with after-tax (i.e., nondeductible) contributions based on compensation and are governed by Internal Revenue Code Section 408(a). Earnings grow potentially tax-free. Unlike the Traditional IRA, a Roth IRA does not have an age restriction. Any individual with “compensation” that falls within certain income limits can contribute to a Roth IRA. Roth IRA contribution limits are not impacted if an individual is covered by an employer-sponsored plan.

Roth IRA accounts are best suited for individuals wishing to save for retirement by trading tax savings now for tax-free withdrawals later and for clients who anticipate being in a higher tax bracket upon retirement.

A Rollover IRA is a Traditional IRA that is often utilized by those who have changed jobs or retired and have assets accumulated in their employer-sponsored retirement plan, such as a 401(k). Deciding what to do with your retirement assets could determine whether you’ll be secure in retirement or struggle to make ends meet. Moving your 401(k) or rolling it over into an IRA account may provide you with a broader range of investment options not available in your employer 401(k). It also provides greater flexibility in ongoing asset management within an IRA.

When moving a retirement plan to an IRA, you typically will have three options:

• Leave the money with the former employer, if permitted;
• Roll over assets to the new employer; if permitted; or
• Roll over to an IRA or cash out the account value.

Each option has its own set of advantages and considerations.

At HD Vest, we understand the importance of retiring in financial dignity. Your HD Vest Advisor is prepared to help you find retirement solutions, such as IRAs, and look for opportunities that help ensure you don’t outlive your retirement income. Whether you’re 10 or 40 years away from retirement, there is a plan that meets you where you are.

If you already have a retirement plan in place, your Advisor can do an analysis to ensure that it’s the best fit for you based on your goals and that you’re socking away enough money to retire comfortably. After all, your Advisor knows the full scope of your financial picture, which makes him or her equipped to address your retirement needs holistically. Plus, our Advisors are backed by HD Vest Retirement Specialists who provide technical support and specialized training to further ensure you are paired with the best solutions possible.