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It can be troublesome to determine which type of IRA is best for your long term goals: a traditional IRA or a Roth IRA. Do you know the difference between the two? Unlike a traditional IRA that is funded with pre-tax dollars from your employer, a Roth IRA is funded with after tax dollars. Because the taxes are paid upfront, the withdrawals are tax free, and that can be highly advantageous for a variety of reasons. When choosing which type of account is best for you, the most predominant factor when determining which investment strategy is ideal for your needs is your income levels, both present and future. If you earn very little money now, then a Roth IRA might be the better choice because you don’t need the write offs at present time. Then again, depending on your potential future income, a traditional IRA might be the better choice. One other thing to consider is whether or not you’ll need the money right away. A Roth IRA requires the beneficiary to be at least 59.5 years of age, and there is usually a minimum time line before withdrawals can be made. To find out which type of IRA is suitable for your investment and retirement needs, you’ll need to speak with a licensed agent within your state. Laws and regulations change almost every year, and each state has its own unique rules. Want to open an IRA or a Roth IRA? Speak to a licensed agent. |