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Retirement Advice For Which Plan To Use

Posted on | May 1, 2011 | 4 Comments

There are many ways to put back money for retirement and many ways to invest without a saving of money for retirement. Some of the plans that can be used for retirement include Individual Retirement Accounts and company retirement accounts. Discussed below are the advantages and disadvantages to holding an individual retirement account known as a Roth IRA.

A Roth IRA is a retirement account that allows for an individual within a certain income bracket to contribute a certain amount of money each year to a fund. The fund is not tax deferred meaning that the year the money is placed into the account it will be taxed as normal income. As stated above there are Roth income limits and contribution limits that regulate how much a holder can make in order to contribute and how much a person can contribute based upon their income.

For most people the income limits are not a problem depending on your filing status, but basically an individual can not make over $180,000 in one year in order to contribute to a Roth IRA. If you have in the past qualified for contributions and have placed your money into a Roth IRA but the next year you did not qualify for contributions then the money previously contributed will be safe and tax sheltered. One major difference in a Roth IRA in comparison to other retirement accounts is the fact that the money in the fund never has to be withdrawn.

If the owner of the account decides they do not need the money it can be passed to an heir, or if the holder decides to wait longer to withdrawal funds there is no specified age at which funds have to be withdrawn. All other retirement accounts state that by a specified age minimal funds have to be withdrawn or a penalty will be applied to the funds.


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