The initial stages of investing in your retirement can feel confusing and even daunting at times. You may not know where to begin when it comes to IRAs, let alone understand the differences between a traditional IRA and Roth IRA. While there are differences between these two types of IRAs, they serve as a great way to build income for retirement. Taxation is one of the most significant differences between a traditional IRA and a Roth IRA. In terms of a traditional IRA, the money contributed is pre-tax, much like a 401(k). A Roth IRA, by comparison, comprises contributions made with taxed money. So while the latter enables you to worry less about being taxed on investments, the former essentially defer tax payments. Either option enables workers to save up to $6,000 per year toward retirement utilizing a variety of funds. For example, by investing in a Roth vehicle, you can save a significant amount on taxes by pre-paying at the current tax rate. Additionally, depending on when you retire, your current tax bracket could be lower, making a Roth IRA an excellent savings avenue. Single tax filers can contribute to a Roth IRA if their adjusted gross income (AGI) remains under $144,0000 per year ($214,000 for married couples). While there are income limits with a Roth IRA, traditional IRAs feature no income limits. Certain workers, such as those with a work-sponsored retirement account, may experience income limits for specific contributions. However, there are avenues to explore by wealthier individuals and couples looking to avoid income limits.
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Email: [email protected]
Phone: 5167611515
Bio:
I have worked with Deloitte Partners, Directors and Principals for approximately 30 years, saving them considerable amounts of money on their Group Term Life Insurance Premiums. We have also addressed Long Term Care within Life Insurance and Fixed Index Annuities. The Annuities Guarantee fixed interest rates and Long Term Care doubling. Protected from any corrections in the stock market. Great for retirement planning.
