Hi, I'm working on a paper for my math class. I'm working on "will the millennials ever able to retire? my topic for this is IRA, Roth IRA, and Social security. my question is who runs these, how is the money distributed, is it risky, if there are any age rules, what are the benefits, and how much is taxed by our government?
IRAs, or Individual Retirement Accounts, come in two different forms. Traditional IRAs allow individuals to contribute up to $5,500/year ($6,500 if they are over 50) to investment accounts. They can deduct the amount of their contribution from their taxes each year. When they start withdrawing funds from their IRA (they are not allowed to withdraw them without a penalty until age 59 1/2) they have to pay tax on the earnings that the investments make. With Roth IRAs, on the other hand, you don't have to pay tax on the earnings but you also are not able to deduct your annual contributions each year. The only fees associated with both kinds of IRAs are whatever fees the particular bank or investment company charges for investment accounts. They will vary depending on what types of investments the individual selects. IRAs are offered by banks and mutual funds companies such as Vanguard, Fidelity, T. Rowe Price, and many others. Most people who have IRAs invest them in mutual funds.
Social security is a retirement benefit provided by the government for anyone who has worked at least 40 quarters (ten years) in the U.S. People can start claiming their benefits when they turn 62 or can wait to claim then until after age 70. The longer they wait the higher the monthly amount they will receive. The maximum possible monthly payment is based on how long they worked and how much money they made when they were working. Social security benefits are taxed by the federal government and by some states.
The IRS and Social Security Administration web sites have much more detailed information about these retirement savings options. I'd suggest looking at those for more information.