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What is an IRA?
An Individual Retirement Account (IRA) is an account that helps people save and invest for their retirement while enjoying certain tax advantages. IRAs can be used by those who are self-employed, business owners, or simply people who want to invest with tax advantages. To encourage people to save for the long term, the IRS imposes a penalty on withdrawals before age 59½.
Tradicional IRA
- Get your tax benefits upfront
- Don’t pay income tax on the money you put in
- Pay income tax when you withdraw
- Best if you already have an emergency fund
Roth IRA
- Get your tax benefit at retirement
- Pay income tax on the money you put in
- No income taxes for withdrawals after age 59½
- Can be used in case of an emergency
Traditional IRA vs Roth IRA
| Traditional IRA | Roth IRA | |
| Funded with | Pre-tax dollars | After-tax dollars |
| Contribution limits | $7,000 ($8,000 if age 50 or older) | $7,000 ($8,000 if age 50 or older) |
| Withdrawal age* | Age 59½ and over | Age 59½ and over |
| Income limits (2024)** | No income limits to participate | Modified AGI single $161,000/married $240,000 |
| IRAs traditionales | |
| Funded with | Pre-tax dollars |
| Contribution limits | $7,000 ($8,000 if age 50 or older) |
| Withdrawal age* | Age 59½ and over |
| Income limits (2024)** | No income limits to participate |
| Roth IRA | |
| Funded with | After-tax dollars |
| Contribution limits | $7,000 ($8,000 if age 50 or older) |
| Withdrawal age* | Age 59½ and over |
| Income limits (2024)** | Modified AGI single $161,000/married $240,000 |
* Roth IRA: Early distributions or withdrawals of contributions and earnings could avoid tax penalties provided it is a qualified exception such as unreimbursed medical expenses, first-time home purchase, qualified educational expenses, death, disability, and health insurance costs, if unemployed. Traditional IRA: There are no income limits for Traditional IRAs, but there are income limits for tax-deductible contributions. Other rules apply to both IRAs. Please consult with a tax expert for more details.
How much could you save for your retirement?
No matter your age, time and consistency are the keys to investing
Plan Your Retirement with Emma
When you open an account with Finhabits, you’ll receive support from Emma, our virtual financial planner, directly within the app. Emma will help you evaluate your progress and adjust your strategy, and is available 24/7 for our members.
Do your rollover today
Consolidate Your Accounts in One Place
With Finhabits, you can simplify your path to retirement: if you’ve changed jobs and don’t want to leave your savings in your former employer’s plan, or if you have multiple retirement accounts (Traditional IRAs, 401(k)s, or others) and want to consolidate them, transfer everything into one easy-to-manage account designed to help your money grow.
How it works
Invest easily and securely in just a few easy steps
- Open your account with an SSN or ITIN
- Choose your goal and the portfolio that best suits your profile
- Deposit automatically
- Access Emma, your virtual financial planner, to assess your progress and adjust your strategy, from the app
Why invest with Finhabits
Finhabits combines technology, automation, and personalized support to help you make smarter financial decisions. With membership, you get access to tools that simplify your path to retirement, without the hassle.
- Invest starting with affordable amounts - there's no minimum
- Personalized and automated portfolios
- Emma: your virtual financial planner, included with your membership
- Bilingual customer service
- Regulated by the SEC and protected by SIPC - your money is in accounts insured up to $500,000 by the SIPC*
*Finhabits Advisors is an SEC registered investment adviser. Registration does not imply a certain level of skill or training. Securities in your account are protected up to $500,000. See SIPC.org for more details.
FAQs
There is a $100 minimum deposit required to open an IRA with Finhabits.
Yes, Finhabits allows you to withdraw your IRA money at any time. Keep in mind that the IRS may impose an early withdrawal penalty before the age of 59 ½ with the intention of encouraging you to save long-term. Under some special, qualified exceptions, you can withdraw money from your IRA without penalty. Rules vary depending on the type of IRA you have. Roth IRA allows you to withdraw your contributions at any time without any penalty or federal tax if you have met the 5-year account requirement. Other rules apply. Please consult with a tax expert for more details.
Yes, please contact the Finhabits support team and they’ll guide you. Call 1-800-492-1175 or send an email to support@finhabits.com.
The amount you receive when you retire at 65 will depend on many factors. Ask yourself how much you want to have saved by the time you retire and use our calculator to estimate how much you need to invest to achieve your goals.
The average retirement age in the United States is 62.1 Start investing today with Finhabits so you can retire at the age you want and with the comfort you deserve.
A 401(k) plan is a qualified deferred compensation plan that employers offer their employees. It allows you to contribute a portion of your salary pre-tax, lowering your current taxable income. Many companies also offer a match of your contributions. If your employer doesn’t offer a 401(k) plan, your best option is an IRA. With Finhabits, you can open an IRA account in just a few minutes.
Generally, distributions from your 401(k) can begin penalty-free at age 59½. If you decide to withdraw your money before that, you could pay up to a 10% early distribution tax on the amount withdrawn, plus applicable taxes.2
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