Individual retirement accounts (IRAs) offer investors a fantastic opportunity to save on taxes. Pay for your future by investing in an IRA, and you can also lower your income tax bill. A Gold IRA is a great option for those looking to diversify their retirement portfolio and because the plan's money is released from Uncle Sam's clutches, interest, dividend and capital gains income can increase each year without being reduced by taxes. But despite how positive all of this is, there are good reasons to have an IRA in addition to your 401 (k). An IRA not only gives you the ability to save even more, but it can also give you more investment options than you have in your employer-sponsored plan.

And if you have a Roth IRA, there's also a chance to earn tax-free income in the future. The main benefit of an IRA is that your money grows and accumulates tax-free or tax-deferred, but that's not the only benefit. The stock market is never guaranteed, so even if your IRA is invested in stocks or mutual funds, there's always a chance that the value of those investments will go down. If your 401 (k) plan has limited investment options, consider opening a traditional or a Roth IRA and contributing to the annual maximum.

The most common types of IRAs are traditional IRAs, Roth IRAs and simplified employee pension plans (SEP IRAs). But at the end of the day, choosing a 401 (k) plan or IRA is less important than simply starting to save for retirement. The traditional IRA offers the greatest benefit for most people because their contributions are tax-deductible. So, use all available savings and investment mechanisms, including an IRA and your 401 (k), to save as much as you can, as soon as possible while getting the maximum tax relief.

IRAs are designed to supplement other sources of retirement income, such as pensions and Social Security. If you think you'll be in a lower tax bracket when you retire than you are now, a traditional IRA may be the best option for you. For these reasons, it's essential to weigh the pros and cons of an IRA before deciding if it's right for you. One advantage of a reinvested IRA account is that, when done correctly, the money maintains its tax-deferred status and does not entail taxes or early withdrawal penalties.

In general, SEP IRAs are IRAs for self-employed people or small business owners with few or no employees. There are income limits for a Roth IRA, so the amount you can contribute is gradually reduced depending on how much you earn. However, the type of IRA that makes sense for you personally will depend on your tax situation and income, so there's something else to consider. The best part is that you can transfer your current IRA to an annuity, so you don't have to worry about losing any of your hard-earned savings.