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Hello. My name is Tony Anzalone, Chartered Financial Analyst and
Vice President of FideliTrade Incorporated.
Welcome to our
series of short videos about Individual Retirement Accounts. Today, I'd like to
cover the basic question --
What is an IRA? An Individual Retirement Account, or IRA for short,
is a savings plan that allows you to make tax-deferred investments your
personal retirement plan.
IRA's were first introduced back in 1974 when Congress enacted
the Employee Retirement Income Security Act, more commonly refer to
as ERISA. As a result of this law,
individuals that were not already covered by a qualified employer plan
could contribute pre-tax income into an IRA.
In 1981, the Economic Recovery Tax Act
modified ERISA and, among other things, allowed
all persons under the age of 70-1/2 to contribute to an IRA.
A few years later, in 1986,
the Tax Reform Act expanded investment opportunities by allowing American Eagle
bullion coins into IRAs. (Prior to that time,
precious metals were considered "collectibles" and not allowed.) In 1997,
the Taxpayer Relief Act further expanded investment selection
by allowing other gold, silver, platinum and palladium bullion
investment products into IRAs provided they meet two conditions:
First, bullion must meet minimum fineness
(or purity) requirements, and second, the bullion
must be physically held by a "bank" as defined in the IRS Code.
You can set-up an IRA with financial institutions, such as a bank,
regulated securities brokerage firms,
or an IRA custodian. In 2014,
the maximum contribution for persons age 49 and younger
is $5,500; the maximum contribution for those 50
and older
is $6,500. Now these limits increase from time to time,
so be sure to check the IRS regulations each year.
And, in order to get your yearly deductions,
all contributions must be made by the April 15 tax deadline.
The money in the IRA must be held until age 59-1/2 before
non-penalized distributions can be made.
Withdrawals must start to be made no later than
age 70-1/2. At this age,
most people's income has decreased and they fall to lower tax bracket --
just one of the benefits of IRA's.
In upcoming videos, I'll cover the different types of IRAs,
the benefits of retirement saving, the benefit the adding gold and other
precious metals to an IRA,
and how to set-up, fund and invest through a Self-Directed IRA.
Thank you for watching.