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Have a Plan for Your IRA

Deciding the best way to plan for retirement is a significant component of asset protection planning in Naples. One option available is an Individual Retirement Account (IRA). An Individual Retirement Account (IRA) can be a valuable addition to your retirement planning arsenal. IRAs offer tax advantages that can help you grow your nest egg over time. Traditional IRAs allow for tax-deductible contributions, reducing your current tax burden, while Roth IRAs provide tax-free withdrawals in retirement.

The power of compounding further enhances the appeal of IRAs, as your investments can grow unhindered by capital gains or dividend taxes. Additionally, IRAs offer a wide range of investment options, from stocks and bonds to real estate and precious metals, allowing you to tailor your portfolio to your risk tolerance and financial goals. However, it’s essential to consult with a financial advisor to determine the best IRA strategy for your unique circumstances. At the Nici Law Firm, we offer financial advising to our clients.

IRA PlanWhat is an IRA?

An IRA is a retirement account that individuals can open in their own name. IRAs are tax-deferred, which means that the account holder does not pay income on the earnings while the money is in the account.

There are annual contribution limits for IRAs in Naples. As of 2023, you can contribute up to $6,500 annually if you are under age 50 and $7,500 annually for individuals 50 and over.

Benefits of an IRA

There are two primary benefits of opening an IRA:

1. It offers meaningful tax benefits.
2. It provides protection from creditors.

IRAs offer significant tax benefits in Naples, Florida. The tax advantages of your account will depend on the type of IRA you open. The two main types of IRAs are discussed in further detail below.

In addition to tax savings, IRAs offer protection from creditors. Under Florida Statute Section 222.21, IRAs and other tax-deferred retirement accounts (i.e., 401k plans and pensions) are shielded from creditors in civil judgment and bankruptcy cases. However, distributions or withdrawals from IRAs are not protected against creditor claims. This means that once you take the money out of your IRA, it can be reached by your creditors.

What Type of IRA is Best For Me?

There are two main types of IRAs to consider. When discussing your financial goals with Naples attorney James Nici, together you can decide if an IRA is right for you and if so, which type of IRA is best.

1. Traditional IRA – Anyone with earned income can open a traditional IRA. Typically, you get an upfront tax deduction with your contribution, and the earnings grow tax-deferred. You must pay ordinary income taxes when you take money out of the IRA. Additionally, you may have to pay a ten percent penalty if you withdraw money before age 59 ½.

2. Roth IRA – You must meet income requirements to contribute to a Roth IRA in Naples. As of 2023, you must have a modified adjusted gross income (MAGI) of less than $153,000 as a single filer and less than $228,000 if you are married and filing jointly. There is no up-front tax deduction when you contribute to a Roth IRA. However, the earnings grow tax-deferred, and you can withdraw money tax-free at age 59 ½ as long as you have held the Roth for five years.

Naples asset protection attorney James Nici can help you decide which option is best for you.

Call Naples Asset Protection Planning Lawyer James Nici

If you have questions about the use of  IRAs in your retirement planning, please contact the Nici Law Firm. James R. Nici is an experienced Naples attorney with over 25 years of experience in asset protection, strategic estate planning, and business planning.

Contact our office today at (239) 449-6150 or use our web form to send us a message and tell us about your situation. With offices located in beautiful Naples, Florida, we serve clients throughout Florida.

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