Many consumers across the country have investment vehicles in their names as they try to save up for their retirement, but many of these products come with different tax rules associated with them. Perhaps one of the products that taxpayers understand least in this regard is the IRA, which is incredibly popular as a savings account, but carries with it some unique rules.

The first thing consumers have to know about how much they can put into an IRA changes depending upon their age. For this tax year, that limit (which they can exceed but will have to pay a penalty fee for every dollar over the limit) is $5,500 for most consumers, but those over the age of 50 years old - who are therefore in the final home stretch before they reach their retirement age - can contribute up to $6,500. However, that's just a general rule, because there are certain eligibility requirements consumers must meet as well.

Further, there may be significant confusion about traditional IRAs and Roth IRAs, both of which carry those limits, but which also have varying tax implications for savers.

What's the difference?
With a traditional IRA, consumers are allowed to deduct every penny they contribute to the fund from their annual income, which will likely lead to a significant tax break. Any gains made on these investments are deferred, meaning that they are not paid until the time of withdrawal. However, those who take money out of an IRA before they turn 59.5 years old will not only face the tax, but also a 10 percent penalty on every dollar they remove.

Meanwhile, a Roth IRA does not allow for deduction on contributions, but any withdrawals made decades down the line are then tax-free. Moreover, there is also the 10 percent penalty for withdrawing from a Roth account early, and consumers will have to pay income taxes on those withdrawals as well.

Therefore, it might be wise for people thinking about this type of investment vehicle specifically to consider the ways in which their personal financial situations would be impacted by each kind of account. Doing a little bit of math can go a long way toward ensuring a stable financial present and future.

Further, it might be wise for consumers to visit a nearby tax office to help them in the tax preparation and filing process, not only in the few months before the deadline, but throughout the year. This will help them fully plan a reasonable strategy.