Computer screen with line graphs and numbers, image used for Nicholas Fainlight blog about why you need to open an ira

Whether you open a traditional IRA or a Roth IRA, there are great benefits to either. It’s a personal decision on which type you’d want to open and depends on your personal financial situation, but saving for retirement is a must. If you’re young, it probably doesn’t seem like that pressing of a concern, but the sooner you start, the better.

Add to other accounts

Even if you already have a retirement account with your employee, like a 401(k), you can still take advantage of an IRA account. Traditional IRAs and Roth IRAs do not let you contribute more than $5,500 per year, but it’s still incredibly beneficial, especially if you do not have another retirement account open. Adding the most into your retirement accounts as possible can only help you as you get older.

Be prepared for your future

Saving as much as you can for retirement is one of the best decisions you can make for your future. You won’t be able to (and certainly won’t want to) work the rest of your life, so you need to have enough money to live off of after you retire from your job. Taking steps to prepare for retirement is something you should do as early as possible so you don’t miss out on contributions in years when you have fewer financial responsibilities.

Save on taxes

A great perk of IRA accounts is that you benefit in the taxes you have to pay. Depending on which type of account you choose, you may not have to pay taxes on the money you contribute or you avoid paying taxes in the future when you need to pull out money for retirement. Learn the tax differences and decide which best fits your finances.

Combine with other accounts

Another fantastic benefit of IRAs is that you can often meld your other retirement accounts with your IRA. If you have an account to save for retirement with your current employer, but end up changing jobs, you’ll want to transfer that retirement fund to something you have control over. Find out if you can combine it with your IRA.

Pass on to your children
Finally, if there’s unused money in your IRA account after you pass away, this money can get passed onto your children. Even if you know you won’t need the money, creating an IRA account for your children, particularly a Roth IRA, is a fantastic way to ensure your children receive the money you want them to get.