10 Reasons You
Need a Roth IRA
1. Tax-free growth and withdrawals
• Roth IRA
withdrawals in
retirement are
tax-free.
• Traditional IRA
contributions can
...
2. No required minimum distributions
• Unlike traditional IRA
accounts, which
require withdrawals
by age 70-½ , Roth
IRA a...
3. Leave your money to heirs tax-free
• Roth IRAs can be
passed on to your
heirs, who can take
either a lump sum
or period...
4. Withdrawals not included in MAGI
• When you withdraw
from a traditional IRA,
the money counts in
your modified adjusted...
5. Withdraw your contributions at any time
• Unlike a traditional
IRA or 401(k), you can
withdraw your Roth
IRA contributi...
6. Contribute as long as you work
• You can make
contributions to
a Roth IRA so
long as you have
earned income,
even if yo...
7. Take advantage of your lower tax bracket now
• If you’re young, chances
are your income will rise
over your working lif...
8. 16 months to contribute
• You have until the tax
deadline (April 15) to
contribute to your Roth
IRA for the previous ta...
9. Income is not (really) a factor in eligibility
• While you need to
earn less than a
certain income
amount to contribute...
10. Choices, choices, choices!
• Unlike most
company-sponsored
retirement plans,
IRAs allow you to
invest in virtually
any...
How to boost your
income in retirement
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10 reasons you need a roth ira

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Reasons a Roth IRA is the best retirement option

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10 reasons you need a roth ira

  1. 1. 10 Reasons You Need a Roth IRA
  2. 2. 1. Tax-free growth and withdrawals • Roth IRA withdrawals in retirement are tax-free. • Traditional IRA contributions can be tax-deductible now, but withdrawals in retirement are taxed as income. flickr/ 401(k) 2012
  3. 3. 2. No required minimum distributions • Unlike traditional IRA accounts, which require withdrawals by age 70-½ , Roth IRA accounts don’t require you to take money out until you’re ready. • Theoretically, you could let your money compound tax-free until you’re 100. Flickr/ Steven Dipolo
  4. 4. 3. Leave your money to heirs tax-free • Roth IRAs can be passed on to your heirs, who can take either a lump sum or periodic distributions tax- free. • The account must be at least five years old to prevent heirs being taxed on the account’s gains. Flickr/ steakpinball
  5. 5. 4. Withdrawals not included in MAGI • When you withdraw from a traditional IRA, the money counts in your modified adjusted gross income. • Roth withdrawals don’t count in MAGI. • This could help you stay in a lower tax bracket and help you avoid things like the Medicare surtax on investment income.
  6. 6. 5. Withdraw your contributions at any time • Unlike a traditional IRA or 401(k), you can withdraw your Roth IRA contributions (but not gains) tax- and penalty-free at any age, and for any reason. • With other accounts, a 10% early- withdrawal penalty can be assessed. Flickr/ OTA photos
  7. 7. 6. Contribute as long as you work • You can make contributions to a Roth IRA so long as you have earned income, even if you’re past “retirement age.” Flickr/ kdothq
  8. 8. 7. Take advantage of your lower tax bracket now • If you’re young, chances are your income will rise over your working life, putting you in a higher tax bracket when you retire. • Therefore, it could be to your advantage to pay tax on your income now and get tax-free withdrawals later, when you’re in a higher tax bracket. Flickr/ 401(k) 2012
  9. 9. 8. 16 months to contribute • You have until the tax deadline (April 15) to contribute to your Roth IRA for the previous tax year. • This benefit goes for all IRAs, but it’s worth knowing. • So, if you’re starting late, you have extra time to maximize your 2014 contributions. Flickr/ efile989
  10. 10. 9. Income is not (really) a factor in eligibility • While you need to earn less than a certain income amount to contribute directly to a Roth IRA, anyone can convert a traditional IRA to a Roth IRA at any time, regardless of income. • Check out this article for full details on how to accomplish this.
  11. 11. 10. Choices, choices, choices! • Unlike most company-sponsored retirement plans, IRAs allow you to invest in virtually any stock, bond, or mutual fund. • Some brokers will even let you use options and futures in your IRA accounts. Wikipedia/ deerstop
  12. 12. How to boost your income in retirement
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