Jay Vivian, former managing director of the IBM Retirement Funds, explains the power of IRAs and tax-deferred investing. More on keeping your workplace savings protected.
In the U.S. there’s a wonderful form of tax-advantaged investing called an IRA, an individual retirement account. And there’s actually a couple of kinds of them. But the basic idea is that your investing over time, if it’s being done for retirement purposes, it’s going to get tax advantages. There are traditional IRAs and Roth IRAs and which one is right for you is not a trivial decision, but Rebalance can help you look at that decision.
But in general it’s just a great idea because it defers the taxes that you have to pay on some of those assets, and it’s something that people really ought to consider because it’s free money. Deferring the taxes is always a great thing and if you can do that, you ought to.