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Learn the Basics

IRAs are easier to understand than most people think. Once you know the basics it can be simpler to find the IRA that's right for you.

No Fee IRA¹

Annual custodial and maintenance fee waived for all IRAs

What is an IRA?

An Individual Retirement Account (IRA) provides either a tax-deferred or tax-free way for you to save for retirement. There are many different types of IRAs, but Roth, Traditional, and Rollover IRAs are the most common.

An IRA is simply an account. In an IRA, some people invest in mutual funds, stocks, bonds and ETFs, while others choose bank products like CDs and money market savings. Each IRA has certain eligibility requirements and each has unique benefits. Finding the right IRA for you will largely depend on which IRA you are eligible for and which one offers the benefits that are most important to you.

How does an IRA work?

Technically speaking, IRAs rely on the power of long-term, tax-deferred compounding to provide your retirement savings the opportunity to grow more quickly than in a taxable account. What this means is that when you earn interest, dividends or sell an investment (such as a mutual fund) for a gain, in an IRA, you don't need to pay taxes that year on the earnings. Instead, all taxes are deferred until you withdraw those earnings in your retirement². Through the years that can really add up.

Why is an IRA important now?

A good rule of thumb is that it could take up to 85% of your pre-tax annual income just to maintain a similar lifestyle in retirement. That's a tall order, which makes it all the more important that you start saving for retirement sooner rather than later. The chart below illustrates the effect starting early can have on your retirement savings.

Hypothetical example³, assumes an 8% annual return in a brokerage IRA

Comparison Chart

Even though David and Alison both contributed the same amount, by starting 10 years earlier, David has over $300,000 more to enjoy in retirement.

What are the ways I can invest in an IRA?

IRAs are like most other accounts when it comes to how you invest your money. They allow you to choose from investment products such as mutual funds, stocks, bonds, and ETFs, as well as bank products like CDs and money market savings.

Which IRA is right for you?

There are three common types of IRAs available – Roth, Traditional, and Rollover. To determine which one is right for you, compare their benefits and learn about their eligibility requirements.

Find the Right IRA

Common Questions

Get answers to questions you may have and see what other people are asking.

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How to Open Your IRA

2007 Contribution Deadline:
April 15, 2008 (Tuesday)

Contribution Limits:
20072008
$4,000$5,000
Age 50+ can add $1,000 per year as "catch-up" contribution.

Have a Question?

Call our Retirement Help Desk.
1.800.774.4724
Mon-Fri: 8am-9pm ET
Saturday: 9am-5:30pm ET



Privacy & Security Bank of America, N.A. Member FDIC. Equal Housing Lender House © 2008 Bank of America Corporation. All rights reserved

¹ Banc of America Investment Services, Inc. and Bank of America, N.A. charge no annual IRA custodial or maintenance fees, however, fees and expenses are subject to change. Please note that other fees and expenses may apply, including early withdrawal penalties, trustee transfer fees, and standard brokerage fees. For Banc of America Investment Services, Inc.'s standard brokerage fees, please see the Self-Directed Miscellaneous Fees schedule or speak with your full service Financial Advisor. For Bank of America N.A.'s fees, see your Personal Schedule of Fees.

² For Traditional IRAs - If you withdraw before age 59½ you may be subject to a 10% early withdrawal penalty unless the following exceptions apply: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments.
For Roth IRAs - Roth IRA contributions can always be withdrawn at any time without penalty. Withdrawals of any earnings before age 59½, or before the 5 year aging requirement has been satisfied, may be subject to a 10% early withdrawal penalty unless the following exceptions apply: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments. Neither Banc of America Investment Services, Inc. nor any of its subsidiaries are tax or legal advisors. We suggest you consult your personal tax or legal advisor before making tax or legal-related investment decisions.

³ The data illustrated in the bar graph is hypothetical not indicative of the performance of any particular investment. Chart assumes $5,000 annual IRA contributions made on January 1 each year of investing. Assumes annual rate of return of 8% on a non-FDIC insured brokerage investment and tax-deferred compounding in an IRA. Past performance is no guarantee of future results. An account may earn more, may earn less, or may incur a loss. Final account balances are prior to any distributions, fees, and taxes which would lower the ending balance. Taxes may be due upon distribution. You may be subject to a 10% penalty if you withdraw prior to age 59½. Investing in this manner does not ensure a profit or guarantee against loss. Investing in securities involves risks due to price fluctuations.

Brokerage IRAs (non-FDIC insured) are available through Banc of America Investment Services, Inc. Bank IRAs (FDIC insured) are available through Bank of America, N.A.

Banking products are provided by Bank of America, N.A., Member FDIC.

Investment products are provided by Banc of America Investment Services, Inc.® and:

Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

Banc of America Investment Services, Inc. is a registered broker-dealer, member FINRA and SIPC, and a nonbank subsidiary of Bank of America, N.A..

Investing involves risks, including the loss of principal invested.

Neither Bank of America, N.A. nor any of its subsidiaries are tax or legal advisors. It is suggested that you consult your personal tax or legal advisor before making tax or legal-related investment decisions.