Parts of many portfolios, in brief crossword

Individual retirement accounts or IRAs, are a popular way for Americans to save for later life. Those accounts receive special tax treatment - people put in part of their pay and the balance increases year after year through compound interest plus well-chosen investments. IRAs fall into two main kinds - traditional besides Roth. Each kind has its own rules about who qualifies and how taxes apply. With a traditional IRA, the contribution lowers the current year tax bill. With a Roth IRA, the contribution comes from money that has already been taxed, but withdrawals in retirement arrive tax free. Many investors open both kinds so they can balance the tax effects. An IRA is not limited to cash savings - it can hold stocks, bonds, mutual fund shares but also in some cases real estate. Because of this range, the account serves as a flexible part of a long term plan. Anyone who takes money out must follow the timing rules - otherwise the Internal Revenue Service adds penalties and extra taxes. People who are building their first portfolio often start - opening an IRA. The sooner contributions begin, the longer the balance sits as well as multiplies before retirement. A licensed adviser reviews personal goals and comfort with risk then recommends how much to place in each IRA type.