rawlins87 Posted February 1, 2012 Report Share Posted February 1, 2012 School me on Ira's. From what I've researched so far I don't think a roth ira is for me. Quote Link to comment Share on other sites More sharing options...
shittygsxr Posted February 1, 2012 Report Share Posted February 1, 2012 School me on Ira's. From what I've researched so far I don't think a roth ira is for me.I am not saying I agree with you or not but why isn't a roth for you? Quote Link to comment Share on other sites More sharing options...
mello dude Posted February 1, 2012 Report Share Posted February 1, 2012 (edited) - First if your workplace has a 401k plan - work to max it out all you can first. - With a regular IRA, you are allowed to deduct the contribution from you gross income, thus saving some on taxes, $5000 up to 50 years old and $6000 over 50. Also there is a forced withdrawl or distribution at 70 1/2. And there is a major tax hit in case of an early withdrawl. - With a Roth IRA, you can again contribute up to $5K but the money cant be deducted off gross income at tax time. The benifit is that any gains are not taxed ever, and there is no requirement to take out any distributions. Also after 5 years of owning the account - you can take out your base (your original money that you put in, - there might be an over 50 years old requirement on that. gotta check) - If you can stand getting by without the upfront tax deduction, the Roth is the better vehicle over the long haul. I'm sure other "gurus" will kick in........ Edited February 1, 2012 by mello dude Quote Link to comment Share on other sites More sharing options...
conn-e-rot Posted February 1, 2012 Report Share Posted February 1, 2012 Roththat is all Quote Link to comment Share on other sites More sharing options...
rawlins87 Posted February 1, 2012 Author Report Share Posted February 1, 2012 I am not saying I agree with you or not but why isn't a roth for you?Im by no means a tax expert but I liked the idea of being able to write off 5k a year.again im a noob and clueless. Quote Link to comment Share on other sites More sharing options...
rawlins87 Posted February 1, 2012 Author Report Share Posted February 1, 2012 - First if your workplace has a 401k plan - work to max it out all you can first. - With a regular IRA, you are allowed to deduct the contribution from you gross income, thus saving some on taxes, $5000 up to 50 years old and $6000 over 50. Also there is a forced withdrawl or distribution at 70 1/2. And there is a major tax hit in case of an early withdrawl. - With a Roth IRA, you can again contribute up to $5K but the money cant be deducted off gross income at tax time. The benifit is that any gains are not taxed ever, and there is no requirement to take out any distributions. Also after 5 years of owning the account - you can take out your base (your original money that you put in, - there might be an over 50 years old requirement on that. gotta check) - If you can stand getting by without the upfront tax deduction, the Roth is the better vehicle over the long haul. I'm sure other "gurus" will kick in........They offer a 401k and match up to 2%, but im part time because of school and not eligible. Quote Link to comment Share on other sites More sharing options...
mello dude Posted February 1, 2012 Report Share Posted February 1, 2012 Short and sweet.......- reg IRA - some tax saving now - lots more tax later- Roth - a little more tax now - NO tax later Quote Link to comment Share on other sites More sharing options...
ohdaho Posted February 1, 2012 Report Share Posted February 1, 2012 (edited) The huge assumption that makes the Roth IRA the preferred choice for a lot of folks is that when you retire youre going to be in a higher tax bracket than you are now.With the Roth I pay taxes now, but dont pay when I withdraw from it at 59.5 years or older. At that point in time, I would hope Im making more money and in a higher tax bracket. With the traditional, you'll pay the taxes when you withdraw at the same age mentioned above...but thats on top of your other income (which I would hope would be higher than today). Also, you can withdraw the principal invested in the Roth IRA without penalty before 59.5, but with the traditional you pay tax plus a 10% penalty. Is that 5k deduction helping you today? Edited February 1, 2012 by ohdaho Quote Link to comment Share on other sites More sharing options...
shittygsxr Posted February 2, 2012 Report Share Posted February 2, 2012 If you think taxes will be lower when you are ready to retire than skip the Roth. I have a feeling that you are not in a high tax bracket right now and taxes will probably be much higher in the future. I am investing money pre and post tax right now so although I like deferring taxes right now I am sure I will get my ass handed to me by the taxman when I am old and retired. Quote Link to comment Share on other sites More sharing options...
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