Chase Bank wanted to explain what an IRA account is (Individual Retirement Account). It's a savings account specifically designed for retirement. This type of account offers tax benefits that allow the money to grow with long-term advantages.
There are several types of IRAs, such as the Traditional, the Roth, and the Rollover. Each one has tax characteristics and conditions for accessing the funds. Now, Chase Bank explains everything you need to know to become a beneficiary.
Chase Bank shares the benefits of IRA accounts
On one hand, there's the Traditional IRA, which allows you to deduct contributions from your taxes and defer payment until retirement. On the other hand, there's the Roth IRA, which requires contributions with already taxed money, but withdrawals are tax-free, under certain conditions.
Regarding their benefits, with a Traditional you can reduce your current tax bill and, with a Roth, you get tax-free income in the future. In both, the money grows and generates earnings on earnings, which accelerates savings. Also, within an IRA you can choose stocks, funds, bonds, or deposits.
Who can open an IRA according to Chase Bank
Chase Bank clarifies that anyone with income can open an IRA, even if they don't work directly or if their spouse works. For 2025, you can contribute up to $7,000 per year ($8,000 if you're over 50 years old). Traditional IRAs require minimum withdrawals starting at age 73 ("Required Minimum Distribution"), while Roths don't.
The Traditional IRA is better if you expect to be in a lower tax bracket when you retire. That way, you get a deduction now and pay less tax later. The Roth IRA is ideal if you think you'll have a similar or higher tax rate when you withdraw, since you contribute money now and withdraw tax-free.
You can open an IRA at major banks, brokerages, or online platforms, and some allow you to open one with a minimum deposit or even without one. Afterward, you manage the account by choosing investments, reviewing percentages, and making automatic contributions. It's important to report your income accurately to keep your tax benefits in the Traditional IRA.