What are the top reasons to open a Roth IRA today?
- The number one reason is that the money is taxed going into the Roth IRA account, not when it comes out. Paying the taxes before retirement means more money for retirement.
- The Roth is more flexible than a regular 401-k savings account. You choose what you want to invest in for yourself. These investments can range from stocks, bonds, mutual bonds, index annuities, or even real estate. You decide, not the CEO of your company.
- Earnings on your investments can be tax deferred or tax free upon withdrawal if certain conditions are met. Earnings in a traditional retirement are tax deferred until withdrawn and certain early withdrawal penalties may apply if you are under the age of 59.5 years.
- A single person can withdraw up to $10,000 to buy a home after saving for five years. If married the amount of the withdrawal can be up to $20,000. There are no penalties for early withdrawals of this type.
- There are no penalties for withdrawing from your Roth account as long as you do not withdraw any earnings you have received on your investment. A regular 401-k or company saving plan can charge penalties, fees or interest on money withdrawn. These withdrawals can be a big help for paying for life’s unexpected events. This withdrawal can also be used for your child’s education.
- Starting today allows you to save more for the future. The earlier you start to save the more you will earn on your investment. The earlier you start to save the more you can deposit into the account.
- The IRA account can be used as collateral if you wish to open a business, or to help fund someone else’s new business. This means using the business as an investment for the account.
- A Roth account can be left to your spouse or children if something happens to you. The inheritors do not have to pay income tax on the money withdrawn from a Roth account.
As you can see there are many top reasons to start a Roth IRA so contact a financial adviser so that they an explain how to open IRA today. Planning for your retirement has never been easier. Just decide how much you want to save and where you want to invest the funds in your account.