Is the IRA your best investment?

The Economic Recovery Tax Act of 1981 (ERTA) allows all wage earners the benefit of creating and contributing to an Individual Retirement Account (IRA). The IRA is a retirement savings plan which enables the depositor to defer payment of federal income taxes on income saved specifically for retirement. The deposited amount is deductible from current taxable income and the earnings from the IRA investment are allowed to accumulate tax free until they are withdrawn. The benefits available to IRA investors are readily apparent, however, stringent rules and regulations accompanying these benefits make the IRA undesirable for many investors. The purpose of this project Is to evaluate the IRA Investment, thereby enabling potential investors to make a higher quality decision about creating and contributing to an IRA. This purpose will be accomplished by addressing the following topics: I. Evaluate the merits and detriments of the IRA in terms of real value. II. Review the alternative types of IRA investments available. III. Propose alternative investments to the IRA. IV. Express a personal IRA Investment philosophy recommending who should include an IRA in his financial portfolio.