A Roth IRA is a type of Individual Retirement Account which allows your investment money to grow without accruing tax obligations, even when you withdraw it. A normal IRA requires income tax payments when you withdraw your investment savings.
Another advantage of the Roth IRA over the traditional IRA is its flexibility. There is absolutely no penalty when you withdraw your earnings after the age of 59-1/2. Normal IRAs obligate investors to start withdrawing once them turn 70-1/2 years of age, while Roth IRAs allow them to leave the account untouched.
One of the attractive things about both these IRAs is that your money can grow inside them without the need to pay taxes on it every year.
A brief history on the Roth IRA
The Roth IRA was created in 1997, as a much-touted answer to IRA reform of the time. Named for its major advocate, Senator William Roth, it was designed as a convenient retirement plan for those under 70-1/2 years old to grow a meaningful nest egg for their futures. The Roth IRA lets an investor save after-tax funds without any further taxation obligations.
For just one year after its 1997 inception, canny investors could take advantage of the “Roth Loophole” and convert their traditional IRA accounts into Roth IRAs. Later, in 2010, restrictions were eased again, allowing anyone who wished to convert their IRA into a Roth IRA.
Roth IRAs – some pro’s and con’s
– Withdraw your IRA earnings any time you wish, and pay no penalty or taxes.
– Procrastinate almost all you want. You can wait until next year’s tax day in April to contribute.
– With certain restrictions, investors can start saving at any age up to 70-1/2, and can even create a Roth IRA for their children.
– Most companies allow extremely low initial investments. Rowe Price, for example, accepts $50 to open a Roth IRA.
– The investor retains control of where the money is invested.
– Roth IRAs have income limitations. In order to continue to make full contributions, you can only make a certain amount of money.
– The investor would do well to find out whether they will be in a higher or lower tax bracket when they retire. If it’s lower, the traditional IRA might be a better bet.
The Gold Roth IRA
Gold… a safe harbor in times of economic trouble? The experts say Yes, and further tout gold investments as the ultimate hedge for inflation.
Choosing to funnel your savings into a Gold Roth IRA multiplies the value of your Roth IRA itself, taking it to the next level. With some of your savings in an IRA-protected gold account, you not only get the tax-free earnings of an IRA, but also the automatic stabilizing and diversifying qualities precious metals have become famous for.
Gold is considered by economists to be a safe investment. It has proven itself to be a steady grower in the past, compared to the dollar, which has done little but decline in value. A Gold Roth IRA, then, offers the best of all possible investment worlds.
Get it right
The experts agree that the very best way to invest in a Gold Roth IRA is to work with a reputable broker. These companies are set up to help you arrange the purchase and then the storage of your precious metals investments in an independent, certified depository for safekeeping. They are also well-equipped to help you safely ship the physical assets to the address of your choice.
Abundantly secure when carried out by a reputable IRA specialist, your Gold Roth IRA provides all the appeal of a regular Roth IRA, and more. It’s penalty free and tax free, whenever you decide to cash in.
Many companies are set up to do all the work for you, every step of the way, whether you want to open a new Gold Roth IRA, or simply arrange to add gold to an existing account. Choose between taking possession of the physical gold assets or having your IRA specialist store them in a depository approved by the IRS, until you wish to convert them to cash.
It’s that simple. And it’s that smart.
To see the company that we recommend when starting or converting to physical gold Roth IRA – Best Companies to Work With for Gold IRAs.