Since 1998, the Roth IRA has been in existence. Many people continue to ask “what is a Roth IRA?” Keep reading to discover how a Roth IRA works and what its advantages and disadvantages are. Visit gold ira eligible before reading this.
In 1998, the Roth IRA law was passed. Yet, ten-years later, Guest Posting readers are still asking what a Roth IRA is. If you’re not familiar with the Roth IRA or would like to learn more, continue reading to discover how it works and what benefits it can offer.
What is a Roth IRA exactly?
A Roth IRA is different from a traditional IRA. This will help you understand the differences. A traditional IRA allows employees to have income tax deductions for their retirement savings and investments. The money is taxed when you retire or withdraw it. You’re deferring your taxes.
A Roth IRA (a new type of retirement account) allows employees the freedom to withdraw their income tax-free upon retirement. They do not get tax breaks or deductions because they contributed the money.
Is a Roth IRA right?
The Roth IRA may be the best choice for certain people. This allows them to make huge tax savings. Others may not find the difference and opt for a traditional IRA.
Before you consider a Roth IRA. If you have a plan that offers 401(k), your employer will match your contributions up through a set amount. This is free money and not taxed. It’s hard to miss. Many people decide to match their employee’s maximum contribution and combine it with a Roth IRA.