IRA (Individual Retirement Account)
Before delving deeper, we must familiarize ourselves with some fundamental terms. The subsequent explanations are derived from the official IRS page and related resources, paraphrased for clarity.
Personal investment account where income is saved for future. Money can be withdrawn after age 59 ½.
Contributions made to a Traditional IRA are tax-deductible at the time of deposit. However, when withdrawals are made during retirement, they are subject to taxation as regular income.
Unlike a Traditional IRA, contributions to a Roth IRA are not tax-deductible. However, qualified withdrawals from a Roth IRA are exempt from taxation.
In a Self-Directed IRA, investors can choose assets like art or gold. Some investments trigger a 10% tax upon purchase.
Special Custodian for precious metals in IRA allows gold, silver, platinum, and palladium investments, taxed like stocks or bonds in Traditional/Roth IRA.
Moving beyond asset values, examining the number of people who own IRAs in the United States is valuable.
About 36.7% (47.7 million) U.S. households have an IRA. Traditional IRAs are owned by 28.2% (36.6 million) households, and Roth IRAs by 21.0% (27.3 million).
Therefore, 63.9 million households in the United States own either a Roth or Traditional IRA. The remaining 6.6% (8.6 million) of households hold other IRA types, such as SIMPLE, SEP, or SAR-SEP IRAs.
Current statistics show high IRA ownership, expected to increase. There's a need for more public education about Roth and Traditional IRA benefits.