An IRA — Individual Retirement Account — is a tax-advantaged account designed to help you save and invest for retirement. Unlike a 401(k), which is offered through an employer, you open and fund an IRA yourself.

How an IRA works:

  1. You open an IRA through a provider such as RMO Investments, Inc.
  2. You contribute money to the account — up to an annual limit set by the IRS.
  3. You invest the funds in choices such as mutual funds, stocks, or bonds.
  4. The money benefits from tax advantages as it grows over the years until retirement.

The two main types:

  • Traditional IRA — contributions may be tax-deductible now; you pay tax when you withdraw in retirement.
  • Roth IRA — contributions are made with after-tax money; qualified withdrawals in retirement are tax-free.

See Roth vs. Traditional IRA to compare them in detail.

Why members use an IRA: it is a flexible way to build retirement savings on your own — whether or not you have a workplace plan — and IRAs can also receive rollovers from old 401(k) accounts.

Explore retirement options through RMO Investments.

Investments are not FDIC insured, are not bank guaranteed, and may lose value. RMO Investments, Inc. is a separate entity from RMO Bank. This article is general information, not tax or investment advice.