If you’re considering the type of investment you should put your retirement money into look no further. In this article I’m going to show you three reasons why the Roth IRA is the best fit for this option.
First off a Roth IRA has the ability to let you pull money or take a distribution tax free after age 59 and a half without enduring a penalty. This means whatever you have in your account is not going to be taxed. However with a traditional individual retirement account you have to pay taxes on ever dime you pull out of the account no matter what.
Second, when you consider the Roth IRA Qualifications it also has another great benefit. It also allows you to grow your money tax free as well. This means that if you see big returns in your account one year you won’t have to pay a dime in capital gains or ordinary income tax. Unlike a traditional IRA you will have to pay taxes on every single dollar you pull from the account no matter what kind of growth you get on your account.
Third and finally, a Roth IRA also allows you to pay the taxes on your retirement income up front. The reason this is better than withholding your taxes is because in your younger years as your saving you won’t usually be earning as much, and you’ll have the added benefit of other tax deductions like your children, and home interest payments which will lower your tax liability.
In the end these reasons can give you much better options to having a better retirement. However you must also know that you have to abide by the Roth IRA Withdrawal and Qualification rules in order to set up an account like this. So get started today and contact your local financial professional.