Roth IRAs are a very popular and useful accumulation vehicle, and there are some things you should be aware of. Along with Traditional IRAs, Roth IRAs are very important retirement tools and should be taken into careful consideration while deciding upon the account that is right for you.
The first thing you’ll want to know is whether you can contribute, based on income limitations, so check the current IRS website to find out.
Next, you’ll want to weigh the benefits of using a Traditional IRA vs a Roth. Roth IRAs take after-tax contributions, grow tax deferred, and can be accessed tax-free in retirement.
They also give you the liquidity to take penalty-free withdrawals before retirement, up to the amount that you contributed into the account. For the earnings, you will want to wait until after age 59 ½ to withdraw.
Roths are not subject to RMDs, so you are not required to take money out at age 70 ½. Your investment options inside of a Roth depend on the custodian/trustee company that you use.
We encourage you to do your research to find the account that is going to be the most advantageous to you and your investing style.