The main benefit is that investments in IRA’s grow tax-deferred. This means that earnings are not taxed each year – they’re reinvested for more growth. This keeps your investments working harder and allows your money to compound.
Another potential benefit is the ability to deduct contributions from your taxable income. This allows you to pay taxes on less money in the current year, even though you saved it and have it as an asset. Not all IRA’s have this feature, and not every taxpayer can enjoy this benefit, but it can be helpful for some.
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Lindsay Rosenwald