Whether you’re considering opening an Individual Retirement Account (IRA) or a trust, you should know all your options first to make a well-informed decision. Find out more about the top five investing accounts and services that can help you save for retirement.
1. Traditional IRA
When you’re looking for an investing service to assist with retirement savings, one of the best options to look for is a traditional IRA. A traditional IRA is an account that you make contributions to with pre-tax income. Once these contributions are in your account, they will be put towards investments that may grow on a tax-deferred status until you withdraw money from the account in retirement.
Since you won’t have to pay dividends or capital gain taxes until you withdraw, traditional IRAs are some of the most tax-efficient investing accounts. The lack of taxation on the money you deposit in these accounts means your contribution can grow until retirement without any taxes slowing them down. Contributions to these accounts are also usually tax-deductible, making them even more beneficial.
2. Roth IRAs
Another common type of IRA is a Roth IRA. This type of retirement savings account offers an alternative to a traditional IRA, where you contribute after-tax dollars to it. Unlike traditional IRAs, where you will be taxed after withdrawing money, you can withdraw your Roth IRA contributions tax-free after a set age. However, any contributions you make won’t be tax-deductible. Like traditional IRAs, the money you contribute and the earnings you receive from your contributions will grow tax-free while in your account.
3. Fixed Income
When you want to receive a consistent income throughout your retirement, a fixed-income account may be a choice to consider. With one of these accounts, an investment advisor will add bonds to your portfolio to provide risk diversification and generate income. The income you earn from these bonds can be sent directly to you or used for reinvestment. Since bonds are less risky than stocks, many retirees turn to fixed-income services to give them a consistent stream of funds during retirement and reduce their overall portfolio’s risk.
4. Equity Selection
Another investing service that can help you save for retirement is equity selection. When you turn to a wealth management officer for assistance with equity selection, they will help you select stocks that are more likely to have long-term growth and enhance your income. The goal of equity selection is to purchase stocks with below-average risk to assist with your future spending needs. Equity selection also aims to protect your portfolio from the negative effects of inflation.
A trust can help you to manage assets for your loved ones and ensure that they have the financial resources they need when the time comes. Trusts are legal entities created by an attorney with an individual, referred to as a grantor, who holds and distributes assets. For your personal retirement planning, you can have your trust distribute funds for your potential needs in later life.
Besides allowing you to set aside funds for your retirement, a trust allows you to directly transfer legacy assets to beneficiaries, such as family members. You might also have your trust give to charities or provide funding to beneficiaries with special needs who will require continuous support throughout their life. If you’re interested in a trust, our wholly owned subsidiary, Plimoth Investment Advisors, can help you create your trust, appoint a professional grantor, and utilize the best estate planning strategies to administer your account.
Choose the BayCoast Family for Your Retirement Savings Needs
If you’re looking for wealth management firms near you and want to ensure you have a plan in place in order to save for retirement, BayCoast Bank and Plimoth Investment Advisors are here to help you. Our team of financial experts can guide you through the various accounts we offer and ensure you receive meaningful assistance every step of the way.
Investment products are not deposits or obligations of, nor guaranteed by any bank or bank affiliate. Not FDIC, DIF or SIF insured. Not insured by any federal government agency or bank affiliate. May lose value and may be subject to investment risks, including loss of the principal amount invested.