- Personal Finance»
what is roth Ira retirement plan advantage and disadvantage over traditional individual retirement plan
What is Roth IRA:
Roth IRA (Individual Retirement Plan) is one of retirement plans that are generally not taxed. Roth ira is a retirement plan to look that allow tax reduction on limited accounts of saving for retirement .Though there are some roth ira limits that you must know before you choose ROTH ira.It is one of the most popular retirement saving account.
Everyone sooner or later thinks about saving money for retirement after all no one wants to work forever.The sooner you think about saving money for retirement will help you plan your retirement more easily.Everyone wants to live a comfortable retirement life with no financial problem so this is where the retirement plans comes.US Tax Laws are kind enough to let you open an account of saving for retirement that are generally not taxed -Roth Ira is one of them.There are certain conditions that you should meet to open a Roth ira account of saving for retirement that is not taxed.Every IRA(individual retirement account) has some advantages and some disadvantages.You should go through the advantages and disadvantages of many individual retirement accounts and know the terms and conditions of each to select what retirement plan will suit you best.If a particular IRA is best for someone else then its not necessary that IRA will be ideal for you.Choosing of right IRA account must be done very carefully because this is what you will have after you retire.There are a number of such IRA accounts having different terms and conditions I will try to give you a brief information on ROTH IRA with its advantages and disadvantages this roth individual retirement plan may suit you and may not suit you this is something that you know better .You must gather as much information on a particular IRA as you can before choosing it for your retirement savings
Roth IRA basic advantage over traditional IRA
Roth individual retirement plan provides you a tax free growth and it is considered to be one of simplest retirement plans available.Other normal ira accounts collects contributions using tax deductions that depend on how much income you get while Roth ira is opposite.You have to pay taxes when you widraw money from normal IRA accounts while withdrawing of money from Roth ira is tax free.This is one of the good things about Roth ira that makes it different from traditional Ira.
Roth IRA basic disadvantage over traditional IRA
The above mentioned advantage of the roth ira over traditional ira can also be a disadvantage if the tax rate goes down at the time of withdraw.This mean even if you don't have to pay any tax on withdraw of your savings there is a possibility that the tax rate at that time decreases from what you have been paying before that could be a disadvantage of Roth ira
Should you choose Roth ira?
The answer is different for everyone.Although the Roth ira is the most popular and simplest ira available but it is not necessary that it suits everyone there are strict terms and conditions for every ira and you must do a good research work before choosing any ira.