When it comes to investing for the future, there are many resources that the average person can use to make sure that they have a financially comfortable retirement. Many businesses offer retirement savings plans, such as 401(k)s that a person can take advantage of. If a person wants to be more proactive, they can seek out non-employer-sponsored savings accounts, such as an IRA in Yuba City CA.
The fact is that an IRA, which stands for individual retirement account, is one of the most popular and effective methods of saving for retirement. These accounts are often considered micro portfolio investments. The reason for this is that IRAs are a mixture of various different investments.
Much like a portfolio will have a wide range of investments, IRAs also employs this technique as well. The reason it does this is because when one sector is trending negatively, another sector may be trending highly positive. Not only can positive and negative trending sectors help balance out losses, with multiple sectors from commodities, stocks, ETF’s and other investment tools, IRAs tend to offer respectable rates of return.
While the average rate of return annually for this type of account ranges anywhere from 5% to 7%, it’s not uncommon for IRAs to perform at levels of up to 15% to 20% in a given year. This can be extremely beneficial, even if you only have a small amount of money to invest in these types of accounts.
Another benefit to IRAs in Yuba City CA is that you can contribute sometimes up to $7000 a year to the existing funds in your retirement account. Not only does this help improve the principal value of the account, it means that there is more money collecting interest year after year, which can significantly increase the value of an IRA when it reaches maturity.
However, one of the best benefits of an IRA in Yuba City CA is that these retirement accounts are tax sheltered. This means the money that is in the account, as well as the money you contribute to the account, is tax-free. Taxes are only assessed on the account once it reaches maturity, or once you begin to pull money out of that account. This allows for the maximum amount of growth for the funds that you have in your individual retirement account.
