Save Money & Grow Wealth With Roth IRA
Do you want to help lower your taxes and increase your retirement savings? A Roth IRA, with its tax-free growth potential and tax-free withdrawals for you and your heirs, is a way you may be able to do just that (as long as certain requirements are met). And those are just a few of the benefits of a Roth IRA.
One important note: Not everyone can contribute to a Roth IRA, because of IRS income limits. If your income is over the limits, you still may be able to have one by converting existing money in a traditional IRA or other retirement savings account.
Benefits of Roth IRA:
1. Money may grow tax free; withdrawals are tax free, too.
2. There are no required minimum distributions.
3. Leave tax-free money to heirs.
4. Tax flexibility in retirement.
5. Help reduce or even avoid the Medicare surtax.
6. Hedge against future tax hikes.
7. Use your contributions at any time.
8. If you’re older, you can continue to contribute as long as you work.
9. If you’re young, your income is likely to rise.
If you earn too much to contribute
In order to contribute to a Roth IRA, you must have employment compensation, and there are also income limits. If your income is over the IRS limits, the only way you can take advantage of a Roth IRA is by converting money from an existing retirement account, such as a traditional IRA. There is a cost, though. You need to pay taxes on what you convert.
What Are You Waiting For, Get a Roth IRA!
The bottom line is that Roth IRA’s are basically the greatest thing since sliced bread. The tax benefit you forfeit now is small compared to the tax savings you will receive later. Think about the taxes you would pay on one dollar today, and compare that to the taxes you would pay on that one dollar in thirty years, when it has grown to one hundred dollars. Roth IRA’s allow you to grow your wealth tax deferred, and withdraw the money at retirement tax free. Additional benefit is the liquidity of Roth IRA distribution laws, you can take the money out at any time, for any reason.
If you are interested in learning more about tax savings, retirement and strategic financial planning, check out our post on tax reduction strategies, money and relationships, finding your financial power, socially responsible investing and money wise kids.