By Timothy Kelheart
A Roth IRA is an Individual Retirement Account that is generally not taxed, provided certain conditions are met. The tax law of the United States allows a tax reduction on a limited amount of savings for retirement. The Roth IRA’s principal difference from most other tax-advantaged retirement plans is rather than granting a tax reduction for money placed into the retirement plan, the money withdrawn from the Roth IRA plan during retirement is not taxed, with some restrictions.”
The main advantage to this type of retirement plan to others is that it is generally not taxed. This could save you, the investor, thousands of dollars in the lifetime of this account when compared to other retirement accounts that have applicable taxes. Taxes can vary for many reasons and can be staggering
if you have to pay 15 percent to 20 percent+ of what you have invested upon the closure of the account and receiving payment from the financial institution.
Like other IRAs your investment will be diversified within the stock market in securities, common stock, and bonds, mutual funds, notes and possibly even real estate depending on the financial institution that is managing your investment. You should contact a financial advisor before opening any retirement account and make sure that you will be getting the highest return with the ability to move your funds if a better investment opportunity arrives.
With all IRAs the Internal Revenue Service has specific eligibility and restrictions on the investments that can be made within the Roth IRA retirement plan. If you are 49 or younger you can invest $5,500 annually into a Roth IRA and $6,500 annually if you are 50 or older. In terms of marriage both individuals can contribute the amount listed separately without worry. It would worth your investment and the investment of your partner to both obtain and invest into a Roth IRA.
With all investments there are unavoidable risks and costs associated by choosing to invest in the stock market and for your retirement. Please consult a financial advisor before changing or altering your investments.
*This article does not constitute as financial advisement and will not be held responsible for any losses or failure upon the reader to do proper due diligence and obtaining personal financial advisement.