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An IRA makes saving for the future less taxing

IRAs offer an opportunity to save for a comfortable retirement and long-term tax advantages too.

Why invest in an IRA

Benefit from tax breaks

Save on your taxes now with a deduction, or save later with a tax-free withdrawal—it depends on the type of IRA you choose. And in between now and later, let your earnings grow tax-deferred.

Give your money a chance to grow

Build your account with income from interest, dividends, and capital gains that can compound each year without taxes nipping away at it.

Enjoy greater investment flexibility

Pick from a wider range of investment choices than what's offered by most 401(k)s and other employer retirement plans.

Help secure your retirement nest egg

Use an IRA to start saving for retirement or to supplement and help diversify savings you may have in other retirement accounts.

How your savings could add up

While the annual IRA contribution limit of $6,000 may not seem like much, you can stack up significant savings.

Here's a hypothetical example: If you contribute $6,000 yearly and realize a 6% average annual return, at the end of 20 years, you could have $233,956 in your retirement account. (Note that this figure doesn't represent the return on any particular investment.)

Vanguard's low costs add another dimension to your savings

If you invest the same amount in Vanguard funds, which offer expense ratios 83% lower than the industry average,* there's a good chance that 20-year total could be even higher.

Over age 50?

Once you reach age 50, you qualify for an extra $1,000 IRA catch-up contribution. This means your annual limit jumps to $7,000, potentially adding more strength to the power of compounding and greater savings for you.


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Delaying the payment of income taxes on earnings generated in an investment account. For example, if you have a traditional IRA, you don't pay income taxes on the interest, dividends, or capital gains accumulating in the account until you begin making withdrawals.

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The snowball effect that happens when your earnings generate even more earnings, not only on your original investments, but also on any interest, dividends, and capital gains that accumulate. That means that your "money makes money" and can grow faster over time.