Retirement preparing is a frustrating yet necessary process, especially with the precarious position of Social Security. Go with a Roth IRA and you likely probably will not be disappointed. Here are the top five good reasons to go Roth, as compiled by Smart Money.
Roth IRA withdrawals are tax free after retirement
After paying taxes on your earnings, you can put that cash into a Roth IRA. There is no reason to pay taxes on this cash when you withdraw it for retirement. This is because it has already been taxed. More cash is always helpful. Payday loans are fine in a pinch, however they do not constitute a pension plan.
. But let’s assume that it sticks around, and you also believe it will cover you post-retirement. The government is not going to leave you hanging.
No it will not. It’s all too common to read something like this on a Social Security statement: “You can retire on the princely sum of $2,000 per month. You may already be a $24,000 winner!”
401k mutual funds don’t work when compared with Roth IRA
A 401k retirement account gives a retiree the option of choosing from one of two different types of mutual funds. That is very limiting. Your retirement resources are managed more by you with a Roth IRA.
We learn from Smart Cash some more about Roth IRAs. Apparently managing funds is more flexible with Roth IRAs. Contributions could be withdrawn without establishing a compelling cause. A Roth IRA can be used for other things too. One example is saving for your children’s’ education. There are other benefits to being flexible, too. Your financial adviser can help you with this.
Numbers will vary from person to person
Too many individuals tend to put all their money in one place. It is essential not to do so. Many make the decision to put money into a Roth IRA and a 401k. This is to keep themselves from getting in trouble with changing tax rates. Not everyone should make this decision. Before doing anything, meet with a financial adviser for help. Try to avoid short term installment loans. Make decisions that will make that possible for you.
Citations
Smart Money
smartonmoney.com/5-reasons-why-you-should-never-open-a-roth-ira/
Smart Money
smartonmoney.com/roth-ira-basics/
Wikipedia
en.wikipedia.org/wiki/Mutual_fund
When former news anchors hawk IRAs
youtube.com/watch?v=Wkvn-Vgg-8o
