What is a roth ira?
In 1997 the Roth IRA was developed in order to encourage people to plan for their own future rather than relying solely on the social security system.
The Roth IRA shares many things in common with a traditional IRA. But there are a few main differences that you should be aware of when deciding which one is right for planning your retirement. Here are a few of them.
One of the main differences that comes to mind is that the traditional IRA is tax deductible. You are allowed to deduct the amount contributed to the fund for that year from your income when filing taxes. But the Roth IRA is not allowed as a tax deduction.
A second difference is that the Traditional IRA allows only for a few withdrawals that are penalty free, and they are only allowed inder very strict circumstances. This can be very frustraiting in the event that you need to access the fund before retirement.
The Roth IRA has much more loose rules in regard to withdrawals. After 5 years you can withdraw the funds contributed.
The loose rules of the Roth IRA account make it a perfect candidate for an emergency fund. After the seasoning period of 5 years, you can use the fund to cover any unexpected costs and expenses.
When planning your retirement, make sure to consider all these things.
The Roth IRA shares many things in common with a traditional IRA. But there are a few main differences that you should be aware of when deciding which one is right for planning your retirement. Here are a few of them.
One of the main differences that comes to mind is that the traditional IRA is tax deductible. You are allowed to deduct the amount contributed to the fund for that year from your income when filing taxes. But the Roth IRA is not allowed as a tax deduction.
A second difference is that the Traditional IRA allows only for a few withdrawals that are penalty free, and they are only allowed inder very strict circumstances. This can be very frustraiting in the event that you need to access the fund before retirement.
The Roth IRA has much more loose rules in regard to withdrawals. After 5 years you can withdraw the funds contributed.
The loose rules of the Roth IRA account make it a perfect candidate for an emergency fund. After the seasoning period of 5 years, you can use the fund to cover any unexpected costs and expenses.
When planning your retirement, make sure to consider all these things.
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4:43 PM
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