ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Low-risk investments commonly found in IRAs include CDs, Treasury bills, U.S. savings bonds, and money market funds. Higher-risk investments include mutual funds, exchange-traded funds (ETFs), stocks, and bonds. Mutual funds, in particular, are a popular choice for IRAs because of the diversification they offer.

Detailed explanation-2: -Use mutual funds for the base of your portfolio Filling your IRA with individual stocks and bonds is one option. Another is to compose your portfolio of mutual funds or exchange-traded funds (ETFs) for better diversification and, over the long term, better results.

Detailed explanation-3: -Public Provident Funds (PPF):PPF is a government-backed long-term tax-free savings scheme. The money deposited with your PPF account will get tax deduction under Section 80C of the Income Tax Act. The interest earned from such savings is also tax-exempt. You can open a PPF account at the nearest bank or post office.

Detailed explanation-4: -A traditional IRA is a way to save for retirement that gives you tax advantages. Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until you take a distribution (withdrawal) from your IRA.