Chapter 17

Introduction to IRAs


When most people think about planning for retirement, they think of a pension [which is really a defined benefit (DB) plan], a 401(k), or an individual retirement account (IRA). The IRA is probably the most widely used retirement plan type other than a 401(k). If an employer does not sponsor a retirement savings plan, then the employees’ best option is to open an IRA and begin contributing themselves. This takes initiative and personal motivation, but it is entirely necessary. For many taxpayers, their IRA was once a 401(k) that was rolled over into an IRA when they left their job. This is a very big and growing submarket within retirement planning, and it deserves your undivided attention in this ...

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