ROTH IRA vs TRADITIONAL IRA(Which Is Better?) What is an IRA? What EXACTLY are the real differences between a Roth IRA and a Traditional IRA? In this video I explain, in detail, which is better, and let you decide which option is best for you. A Roth IRA vs. Traditional IRA.
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**Timestamps**
00:00 Intro
00:20 What is an IRA
00:45 Traditional IRA
01:15 Roth IRA
02:23 Who can open and contribute
02:52 Contribution limits
03:23 What investments you can make
03:45 Where to open an IRA
04:20 Penalties
05:27 More on Traditional IRA's
07:37 More on Roth IRA's
10:17 What is the 5 year rule
12:05 What are RMD's
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🧩 DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only.
This information is only provided as an informational resource and should not be viewed as investment advice or recommendations. You should always get professional financial advice from a financial advisor near you.
The decisions on how to invest, when to retire, and other financial planning topics are some of the most important financial decisions you will make in your life. I urge you to seek professional financial advice as you make this decision. Ideally, from a financial adviser, AND a CPA AND an attorney. Having the perspective of all three professions will help you make the right decision for you and your family.
This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and may NOT be suitable for all investors.
This information is NOT intended to, and should NOT, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, and/or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
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Is a Roth IRA Better Than a Traditional IRA? When it comes to planning for retirement, one of the best ways to ensure financial security is by contributing to an individual retirement account (IRA). However, choosing between a Roth IRA and a traditional IRA can be a difficult decision. Both options have their advantages and disadvantages, but understanding their differences can help you determine which one is better suited for your needs. First, let's discuss the main distinction between these two types of IRAs: their tax advantages. With a traditional IRA, contributions are typically tax-deductible, meaning that you can reduce your taxable income by the amount you contribute. However, when you withdraw money from this account during retirement, you'll have to pay taxes on the distributions as ordinary income. On the other hand, a Roth IRA offers tax-free withdrawals in retirement. While contributions to a Roth IRA are not tax-deductible, the earnings generated within the account and qualified withdrawals are completely tax-free. This makes a Roth IRA particularly advantageous for individuals who expect their tax rate to be higher in retirement than it is currently. Another key difference is the age restrictions for contributions and withdrawals. With a traditional IRA, individuals can contribute until they reach the age of 70 ½, and withdrawals must begin by age 72. In contrast, a Roth IRA doesn't have any age-based contribution or distribution requirements, allowing you to contribute as long as you have earned income. Additionally, a Roth IRA provides more flexibility when it comes to withdrawals before retirement age. While a traditional IRA imposes a 10% early withdrawal penalty (with certain exceptions), a Roth IRA allows you to withdraw your contributions penalty-free at any time. An added benefit is that you can also withdraw your earnings tax and penalty-free if you meet certain conditions, such as being at least 59 ½ years old and having the account open for five years or more. The amount you can contribute to an IRA is another aspect to consider. For the tax year 2021, the maximum contribution limit for both Roth and traditional IRAs is $6,000, or $7,000 for individuals aged 50 and older. However, it's important to note that contribution limits can change, so staying informed about these changes is essential. Ultimately, whether a Roth IRA or a traditional IRA is better for you depends on your unique circumstances. If you anticipate having a higher tax rate in the future or value tax-free withdrawals in retirement, a Roth IRA may be the ideal choice. However, if you prefer upfront tax deductions and have a lower expected future tax rate, a traditional IRA might be more advantageous. It's wise to consult with a financial advisor to fully comprehend the benefits and limitations of each type of IRA, as well as how they align with your retirement goals. By carefully considering your current and future financial situation, you can make an informed decision and establish a retirement plan that provides you with the desired level of security and financial peace of mind. https://inflationprotection.org/which-is-the-superior-option-a-roth-ira-or-a-traditional-ira/?feed_id=141849&_unique_id=651aeeae3a32d #Inflation #Retirement #GoldIRA #Wealth #Investing #howtoretirenow #iraexplained #IsaRothIRABetterThanaTraditionalIRA #rothiraexplained #RothIRAorTraditionalIRAHowToRetireFaster #RothIRAorTraditionalIRA #rothiravstraditionalira #RothIRAvsTraditionalIRAexplainedwhichisbetter #RothIRAvsTraditionalIRAexplainedwhichisbetterforyou #RothvsTraditionalForBeginners #smartmoneybro #WhatisanIRA #WhichIRAisbetterRothorTraditional #Youneedtoknowthisbeforeopeningarothira #FidelityIRA #howtoretirenow #iraexplained #IsaRothIRABetterThanaTraditionalIRA #rothiraexplained #RothIRAorTraditionalIRAHowToRetireFaster #RothIRAorTraditionalIRA #rothiravstraditionalira #RothIRAvsTraditionalIRAexplainedwhichisbetter #RothIRAvsTraditionalIRAexplainedwhichisbetterforyou #RothvsTraditionalForBeginners #smartmoneybro #WhatisanIRA #WhichIRAisbetterRothorTraditional #Youneedtoknowthisbeforeopeningarothira
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