A traditional IRA is a tax-deferred retirement savings account, meaning contributions are made with pre-tax dollars, and taxes are paid when funds are withdrawn in retirement. On the other hand, a Roth IRA is funded with after-tax dollars, but qualified withdrawals are tax-free in retirement. Traditional IRAs require account holders to start taking required minimum distributions (RMDs) at age 72, while Roth IRAs do not have a required minimum distribution age. Additionally, there are income eligibility limits for contributing to a Roth IRA.
A debit card is linked directly to a checking account and is used to make purchases using the funds available in the account. When used, the funds are immediately deducted from the account balance. A credit card is a type of loan that allows you to borrow money from a lender for purchases or cash […]
A stock is a share in the ownership of a single company, representing a small fraction of the company’s total value. On the other hand, a mutual fund is a collection of stocks, bonds or other assets owned by many investors and managed by a professional investment company. The idea behind a mutual fund is […]
The primary difference between microfinance and traditional finance is the scale of the loans provided. Microfinance provides small loans typically to entrepreneurs and small business owners who lack collateral and credit history. Traditional finance, on the other hand, provides larger loans to established businesses and individuals who have the necessary collateral and credit history. Another […]