Betterment IRA | Better IRAs for Better Investing

Last updated on: October 26, 2011 at 8:35 am by Tim

Betterment IRA | Better IRAs for Better Investing 2011-10-26T08:35:19-05:00 Tim

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Betterment just announced the addition of IRAs to the mix of investing tools available for you to use.

Opening a Betterment IRA

Betterment has just announced (as of December 21, 2011) that IRAs are now up and running. If you’ve been putting of opening an IRA, now’s the time to start. Betterment makes it really easy to visualize your savings and gives you the tools to automate your IRA contributions.

Why You Should Have an IRA

I’m a firm believer in planning ahead for your own retirement. We can’t rely on anyone else to build our nest egg for us, which is why investing in your company 401(k) or opening an IRA is so important.

If you’re not familiar with how an IRA works, check out this article from a while back. Here are some of the highlights of how an IRA works:

The two most common types of IRAs are Traditional and Roth.

Traditional IRAs allow you to contribute to the account with pre-tax dollars, meaning that your taxable income this year will be lower. Your money grows tax-deferred and when you’re ready to draw the funds at retirement (or after age 59 ½*) you will pay taxes at that time.

Roth IRAs allow you to contribute money after it has been taxed. The money in your Roth IRA will grow and both the principal and interest will be available for tax free withdrawal at your retirement (or after 59 ½*).

*Generally, withdrawals made before age 59 ½ will be subject to a 10% early withdrawal penalty, so it isn’t wise to draw funds before you’re eligible.

2012 IRA Contribution Limits

The most you can contribute to an IRA in 2012 is $5,000 ($6,000 if you’re over age 50). Remember, you can still make a contribution into an account for your spouse even if they don’t earn an income. Plus, your 2011 contribution can be made until April 15, 2012.

Be sure to check back with us for updates on how the Betterment IRA can make investing more simplified for you.

Do you already have an IRA or 401(k)? What do you like about the account you have now? Is it easy to make contributions? Easy to change investments?

F&F Readers: Open an account with Betterment and get $25 sign up bonus! Click Here!

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