The Many Benefits of a Roth IRA

A wise man thinks ahead; a fool doesn’t. Proverbs 13:16 

An investment in knowledge pays the best interest. Benjamin Franklin
 
The Roth IRA has changed the whole retirement savings perspective, becoming a fixture in many retirement planning strategies. Here is a look at the trade-off when you open and contribute to a Roth IRA – a trade-off many savers are happy to make.
 
Contribution of after-tax dollars. You’ve already paid income tax on the dollars going into the account, but in exchange for paying taxes on your retirement savings contributions today, you can potentially realize greater benefits tomorrow.1
 
Tax-deferred growth. Roth IRA earnings aren’t taxed as they grow and compound. The earlier in life that you open a Roth IRA, the greater compounding potential you have.2
  
Tax-free retirement income. Roth IRA earnings can be withdrawn tax-free as long as you are age 59½ or older and have owned the IRA for at least five tax years. The IRS calls such tax-free withdrawals qualified distributions. They may be made during your lifetime or to a beneficiary after you die. (If you happen to die before your Roth IRA meets the 5-year rule, your beneficiary will see ...

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