when you recieve your salary already taxed by the employer, Is there any advantage or disadvantage to create an IRA?Thanks
<<<<<when you recieve your salary already taxed by the employer, Is there any advantage or disadvantage to create an IRA?>>>>>Not sure exactly what you're asking here. There are two types of IRA's: traditional and Roth. If you contribute to a traditional IRA, all or part of your contribution may be deductible depending on your income. Assuming you are eligible to make a deductable contribution, you will "recover" the taxes witheld when you file. Money in a traditional IRA grows tax-free, but is taxed upon withdrawl. If you contribute to a Roth, you are contributing after-tax money (i.e. no deduction), but withdrawls aren't taxed.
Please educate yourself by reading the Retirement Planning link below, and the Fool School, http://www.fool.com/school. Then, go to library and read up on IRAs, 401k, and retirment planning.Zev
Hi, lizquierdo, and welcome. Are you left-handed, by any chance? No importa...when you recieve your salary already taxed by the employer, Is there any advantage or disadvantage to create an IRA?If you can stand to read one more reply...Your employer isn't really taxing you. They're just acting as the agent for the Federal and State governments, withholding taxes and sending the money to the IRS and your state Revenue Dept. When you file a tax return next year, you compare what was withheld to what your actual tax for 1999 is. You either pay the rest of what you owe, or get a refund, if too much was withheld. If you open a Regular IRA, you get to subtract those dollars from your income. This should reduce your taxes some.This long-winded explanation covers just one aspect of IRA's. There's a lot more to it, as pointed out by earlier posters in this thread.Good luck!Michael
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