Financial Insurance

• IRA

  Short for Individual Retirement Account, an IRA allows you to save money tax-deferred or tax-free (see below) until the time of withdrawal at retirement. The federal government permits individuals to contribute up to $3000 a year to their IRA. There are Traditional and Roth IRAs. IRAs, however, are only a tax shelter--you still invest your money in actual stocks, mutual funds, or other investments. When choosing an IRA plan, you should shop around and seek professional advice to understand your options and get assistance in your retirement planning.
  
  If you are employed or self-employed you may open an individual retirement account (IRA) and contribute up to $3,000 a year (or your earned income, if less). Married couples can contribute up to a total of $4,000, even if one spouse is not employed outside the home. Depending on your individual circumstances, you may be able to deduct part or all of your IRA contributions on your federal income-tax return. All investment earnings in your IRA compound on a tax-deferred basis. You pay tax on your earnings and contributions that were deductible when you actually withdraw the money from your account. If you withdrawal money from your traditional IRA before age 59 1/2 it may be subject to a 10% early withdrawal penalty and income tax.

• Roth IRA

  Short for Individual Retirement Account, an IRA allows you to save money tax-deferred or tax-free (see below) until the time of withdrawal at retirement. The federal government permits individuals to contribute up to $3000 a year to their IRA. There are Traditional and Roth IRAs. IRAs, however, are only a tax shelter--you still invest your money in actual stocks, mutual funds, or other investments. When choosing an IRA plan, you should shop around and seek professional advice to understand your options and get assistance in your retirement planning.
  
  If you are employed or self-employed you may open an individual retirement account (IRA) and contribute up to $3,000 a year (or your earned income, if less). Married couples can contribute up to a total of $4,000, even if one spouse is not employed outside the home. Depending on your individual circumstances, you may be able to deduct part or all of your IRA contributions on your federal income-tax return. All investment earnings in your IRA compound on a tax-deferred basis. You pay tax on your earnings and contributions that were deductible when you actually withdraw the money from your account. If you withdrawal money from your traditional IRA before age 59 1/2 it may be subject to a 10% early withdrawal penalty and income tax.

• Annuity

  Generally speaking, an annuity is a sum of money payable to a person at regularly specified intervals. Pensions from retirement annuity contracts and personal pension plans are usually paid as annuities, as are lottery payments and some insurance settlements.
  
  An annuity can also be a form of investment. You can pay a lump sum to a financial institution such as an insurance company or bank to buy an annuity, which then pays you a regular income, usually for the rest of your life. The income payments are generally fixed at the outset. Watch out for high sales commissions, expense ratios and penalties for early withdrawals.