Etienne KissBorlase (https://etiennekissborlase.net) Financial Advisor
An Overview of Roth IRAs by Etienne Kiss-Borlase (https://etiennekiss-borlase.net/author/etiennekissborlase/) on December 15, 2022 (https://etiennekiss-borlase.net/anoverview-of-roth-iras/) in Etienne Kiss-Borlase (https://etiennekiss-borlase.net/category/etienne-kiss-borlase/), Finances (https://etiennekissborlase.net/category/finances/)
It is never too early to plan for retirement, regardless of how old you are. Seemingly insignificant choices made now can have a profound impact on your future. While you may already be contributing to an employer-sponsored retirement plan, an Individual Retirement Account (IRA (https://etiennekiss-borlase.net/roth-versus-traditional-iras/)) enables you to make additional retirement contributions while offering the possibility of tax benefits. There are various IRA varieties, each with advantages and conditions. Traditional, Rollover, and Roth IRAs are the three most common options. An IRA that accepts after-tax contributions is known as a Roth IRA. Roth IRAs are funded with after-tax money. The main advantage is that if the account is open for 5+ years, your contributions and the returns on those contributions can grow tax-free. They can also be withdrawn tax-free after the holder reaches 59.5 years of age. Since taxes are deducted from the money at the moment of deposit, all withdrawals after that are tax-free. Other advantages of Roth IRAs include no age limitations for contributions. You may contribute at any age if you have an eligible earned income. This makes it ideal for retirement planning. Gains from investments and contributions accrue taxfree. Your heirs’ withdrawals from your Roth IRA will not be taxed. In addition, unlike a Traditional IRA, there is no requirement to make minimum distributions.