It is never too soon to start saving for your retirement! An IRA is a tax-deferred savings plan that allows employed individuals (and their spouses) to accumulate funds for retirement up to the annual contribution limits. For federal income tax purposes, qualifying contributions are deductible from gross income. Income taxes on the interest earned are also deferred until the funds are withdrawn. Withdrawals without IRS penalty can begin at age 59 1/2 and must begin by the age of 70 1/2. Withdrawals prior to this age limitation are subject to substantial penalties.
Contributions can be deposited to any fixed rate time open certificate of deposit account 9 months or greater. The interest rate on the fixed rate account is guaranteed for the entire term of the investment and interest is compounded quarterly.