10/25/21, 10:12 AM
The Pros and Cons of Roth IRAs | Sylvester Knox | Professional Overview
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The Pros and Cons of Roth IRAs by Sylvester Knox | Oct 25, 2021 | Personal Finance, Retirement
A Roth IRA is a type of investment account that provides tax-advantaged growth and withdrawals. There are many advantages to using a Roth IRA, but there are also disadvantages. In this article, we will explore the pros and cons of these types of accounts to help you decide if they’re right for your needs. The first advantage is that contributions can be withdrawn without being taxed as long as the money has been invested in the account for at least 5 years and you’re over age 59½. This means that any earnings from investments inside the account won’t have taxes taken out before they accumulate interest or dividends – meaning more funds will grow to provide retirement income! Another advantage is that when you’re over age 70½, you don’t need to take required minimum distributions (RMDs) from your Roth IRA. RMDs are the withdrawals that individuals with traditional retirement accounts must make under certain rules. Another advantage is that Roth IRAs are more flexible than many traditional retirement accounts. You don’t have to take RMDs, you can access your account if you need the funds for emergencies or any other reason without being taxed on early withdrawals of earnings, and there are no age limits on when contributions can be made.
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