Should your savings plan include IRA’s? An Individual Retirement Plan is a personal savings plan that may give you tax advantages for setting aside money for retirement. There are various types of IRA’s including Traditional, Simple, Roth, and others. The IRS rules govern the tax consequences of each type — see IRS Publication 590. Currently, one of the most popular is the Roth which is not tax-deductible at the time of contribution but qualified distributions may be tax-free if you meet the requirements.
You can make IRA deposits for 2012 until tax filing time — April 15th. Consult your tax professional to see which type of IRA best suits your situation. Substantial penalties are imposed for early withdrawals, including penalties by the IRS. There are also special rules for allowable and required withdrawals, as well as, limits on contributions.