Is a Roth IRA my best choice?
My job is independent, so I have no benefits whatsoever. I need to start my own retirement planning. Is a Roth IRA my best choice? How much money should I put into it (ideally)? Thanks.
My job is independent, so I have no benefits whatsoever. I need to start my own retirement planning. Is a Roth IRA my best choice? How much money should I put into it (ideally)? Thanks.
I m transparent? Ben like to receive further information?. How old are you? Expect to buy a house or college costs f? To fund for your children? How much did you f? R savings etc.Im general, you should first max out a traditional IRA. This reduces your current tax liability, as these contributions are? GE reduce your current taxable income. Then start making money in the Roth IRA.Au? Addition, you should consult a tax adviser. Not only can he or she help you to help with these kinds of decisions, but they k can you figure out how to lower your taxes – for example, by your health insurance business under your feet and not your own name? .
Fund the Roth fully if possible. If you are under 50 years old this amount would be $4000. 00. There is no tax deduction as with a regular IRA but there is no tax on the investment or its appreciation when withdrawn.
Not necessarily: Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. There are so many opinions and sources but my experience has been even certified professionals can be misinformed. As boring as it is, go to the IRS website linked below and browse the important topics. Print out the relevant items and use them for reference when you talk to your tax/investment professional to keep them in check. In the end the IRS is your dance partner so you will want to be on the same page as them.
It depends. You need to understand the tax benefits of both Roth and traditional IRAs in order to make that decision.
The money you put in a Roth IRA is taxed when you deposit it, so that when you withdraw it, it is TAX FREE money.
A traditional IRA provides a tax benefit now – that is, the money you deposit is pre-tax dollars, so your savings can accumulate faster. However, it is subject to tax when you take it out.
You need to consider the following factors:
1. How many years until you retire?
2. How much can you afford to put away? (Both types of IRAs have annual maximums. )
3. Will the fund performance (Return on investment) meet or exceed tax increases and inflation over the time the money is invested?
4. How much money you make may affect whether you are eligible for a Roth IRA.
Your bank or credit union probably has a staff financial advisor. Our credit union offers free consultation services to its members.
Since your job is independent, you might want to consult an advisor to gather more information before making your decision.
Hope this helps.
The ROTH IRA because of its tax status is by far your best choice . Simply put you will pay taxes on 100% of the money in the traditional when money comes out. Witht the ROTH you will only pay taxes for the money that you put into the the account, not on the growth during the life of the IRA.
Lets look at the numbers both IRA’s will be funded the same and grow at the same rate. So from age 18 to age 65 you put in $5000 for 47 years about $239,000. With the ROTH you will be taxed as you go @ 35% or about $83,650(over 47 years). Traditional tax free (only temporary). We will use the growth rate of 6%
You are now 65 and want your money, it is now worth about 1. 3 million time to enjoy the ROTH where the withdraw is 100% tax free so you can enjoy the full 1. 3 million. While the traditional is now taxable and that means at the same tax rate 35% you owe $470,000 in taxes. If course do you think tax will remain low for the next 47 years?
Remember that you contributes only $239,000 into both accounts
but the ROTH cost you $83,650 and the traditional cost you $470,000. Just about 500% more for the traditional IRA just for the taxes.
Yes you can put in $5000 this year(2007). You can make your contribution for 2007 of $4000 plus you have up till April 15 2007 to put money in for 2006 again up to $4000. So you can get $8000 in the account before April 15. In 2008 the amount will increase to $5000 a year
I have included a link to Fidelity Investments IRA comparison
Hi, I suggest a great site with many issues related to your investment and everything around him. ? Is also a clear and precise pr answer to many frequently asked Fragen.http h: / / investing. sitesled. com / I’m sure your answers in this Website.Good Luck and best wishes!