The Roth IRA is probably going to be the better bet for an IRA for two main reasons. The first reason is that we’re all broke. Our incomes are at a lifetime low so we’re all in the low tax brackets now. That means that the money we save with a deductible IRA doesn’t amount to much. The second reason the Roth is better is because we’re ambitious. It’s quite conceivable that when we retire, we’ll have several millions of dollars in our IRAs. Then you will be in a high tax bracket. But if those millions are in the Roth financial freedom international, it doesn’t matter.
You can take out the contributions any time you want without paying any penalties or taxes with the Roth IRA. In the event of your death, the Roth IRA provides a much more favorable tax angle. Your beneficiaries get the money tax-free. Retirement accounts are usually protected from bankruptcy. Should you ever file, most likely your creditors will not be able to get the money inside your retirement accounts. Some of the financial freedom international money inside your Roth IRA can be taken out, tax-free and penalty-free if it is applied toward the purchase of your first home.
Anyone that makes an income can open a Roth IRA. The only people that can be excluded from making the full contribution to a Roth IRA are those folks who are making salaries about $95,000. The amount of financial freedom international money you have to make doesn’t matter. The only rule is that you contribute up to 100 percent of your salary. So if you’re raking in $500 a year babysitting, you can only contribute $500 to your IRA.
Your stockbroker will be able to open a Roth IRA account for you. Just ask him for an application. The Roth IRA is a retirement account. You’ll be putting money in, and you won’t be taking it out for many years. Stocks and, even more preferably, stock mutual funds are the way to go. Obviously you shouldn’t put any tax-exempt investments in a retirement account, because taxes on these are nil anyway.
If you already have a Traditional IRA, you can switch your money into the Roth IRA. But this may not make sense. Unless the amount of money you have is really small, it won’t make sense. This is because you’ll be hit with a tax. You can just let your Traditional IRA be, and just open a Roth IRA and start contributing to that instead. If you’re still in school and don’t make much money, you can contribute. A minor can open a Roth IRA so long as the minor has earned income.
Before you invest, you need a reason to invest. Investing and planning in you means investing in products like insurance to protect you, what you have, and those you love. It also means investing your time in planning and organizing to be sure you can reach your goals. You can do it and find financial freedom.
Adesegun Akitoye
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