Roth IRA v. Traditional IRA

Roth IRA and Traditional IRA have key differences but both help you save money towards retirement. I will not advice which one works best  because each person’s life is different. According to CBS Money watch ”

  • With a traditional IRA, you can’t contribute after you attain age 70-1/2. At that age, you must start making minimum withdrawals or incur substantial penalties. With a Roth IRA, you can contribute at any age, and you’re never required to make minimum withdrawals. So if you’ve attained age 70-1/2, your decision is made for you — you can only contribute to a Roth IRA.
  • With a traditional IRA, you’ll incur a 10 percent early withdrawal penalty if you withdraw your contributions or investment earnings before age 59-1/2, unless an exception applies. With a Roth IRA, you can withdraw your contributions at any time. There will be a penalty if you withdraw your investment earnings before age 59-1/2, unless an exception applies.”

Even if you are in your 20s you should start saving for retirement because you are never too old to start doing so.  I like the flexibility of Roth IRA; it offers the chance to invest in ETF’s, stocks, bonds, Real Estate or (REIT’s) without having to worry about paying taxes on gains.  Another thing that I like about the Roth IRA is that you can use the money to buy a home. Click here to get further information on Roth IRA. If you want to compare Traditional IRA and Roth IRA click here.

One thought on “Roth IRA v. Traditional IRA”

  1. Hi! This is my first comment here so I just wanted to give a quick shout out and
    tell you I genuinely enjoy reading your blog posts. Can you recommend any other blogs/websites/forums that cover the same subjects?
    Thanks a ton!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.