Deciding whether to choose a Roth IRA or a Traditional IRA is an important decision and can have major financial consequences. Both options, however, are excellent ways to save for retirement. Let’s look as some of the biggest differences between the two. Roth IRA Your contributions are not tax deductible There is no mandatory distribution age Earnings and principal are tax free if you follow all rules and regulations Not everyone can open a Roth IRA. Individuals with modified adjusted gross incomes above $137,000 are not eligible. The figure for married couples filing jointly is $203,000 Principal contributions can be withdrawn any time without penalty (certain conditions do apply) Traditional IRA Depending on your level of income, your contributions may be tax deductible You can make withdrawals without penalty beginning at age 59 1/2. Deductions are mandatory when you reach the age of 70 1/2 When you make withdrawals from
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