Saving for retirement makes sense in this world gone crazy, particularly when the shortcomings of Social Security are taken into account. Here are the top five reasons a Roth IRA retirement account is for you, courtesy of Smart Money.
Roth IRA actually leaves money tax-free for pension
Roth IRA's makes it possible to put cash in. This money has already been taxed. There is no reason to pay taxes on this cash whenever you withdraw it for pension. This is because it has already been taxed. More cash is always helpful. You cannot plan on retirement on pay day loans. They are good for emergencies but not for a lifelong plan.
Social Security probably won't be around too much longer. Everybody has heard the debates on this. But let’s assume that it sticks around, and also you believe it will cover you post-retirement. The government is not going to leave you hanging.
That is not true at all. Social Security statements like this are way too common: “You can retire on the princely sum of $2,000 per month. You may already be a $24,000 winner!”
401k mutual funds are not as effective as Roth IRA
Two mutual fund opportunities are available with a 401k. These can be offered when choosing. Choices appear to be limited. Sometimes you wish you had more. Roth IRAs aren't managed as much by other individuals. They are more for your own management.
Roth IRAs make it easier to manage the funds in it, Smart Money explains to us. If there is need, one can take out contributions. A Roth IRA can be used for other things too. One example is saving for your children's' education. Other benefits are accessible still. Your financial adviser can help you with this.
Figures will vary from person to person
Putting all your eggs in one basket is never a good idea, and this old saying holds true with your next egg. Many make the decision to put cash into a Roth IRA and a 401k. This is to keep themselves from getting in trouble with changing tax rates. Your financial adviser is the first person to talk to about this because it isn't for everyone. Be prepared and minimize your need for short term loans.
Articles cited
Smart Money
smartonmoney.com/5-reasons-why-you-should-never-open-a-roth-ira/
Smart Money
smartonmoney.com/roth-ira-basics/
Wikipedia
en.wikipedia.org/wiki/Mutual_fund
When former news anchors hawk IRAs
youtube.com/watch?v=Wkvn-Vgg-8o
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