Individual Retirement Accounts, known as I.R.A.s, are one of many ways to financially prepare for retirement. Any money invested in an I.R.A. must come from earned income either through regular wages or freelance work. In some cases, you may be able to deduct up to two thousand, two hundred-fifty dollars ($2,250) from your taxes for I.R.A. contributions. However, this is only possible if you are not already enrolled in your employer's retirement program. You may invest in your I.R.A. anytime you are receiving earned income for work. This money will continue growing, tax-free, until you are eligible to begin drawing it out at age fifty-five and a half. If you draw from this account sooner, you will be charged substantial penalties. For more information on Individual Retirement Accounts, contact your bank or financial advisor.
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