In this Estate Planning Minute, Wes Coulson highlights a few differences between both Traditional and Roth IRAs that may be helpful when making retirement planning choices.
Differences Between Traditional and Roth IRAs
Hello, this is Wes Coulson and this is your Estate Planning Minute. I want to highlight a few differences between Traditional and Roth IRAs. Both are means of saving money for retirement.
- With a traditional IRA, you don’t pay tax on the money until you take it out.
- With a Roth IRA, you pay the tax on the money as it goes into the Roth IRA, but then it grows tax free after that.
Kind of makes sense from that, that the younger you put money into a Roth IRA, and the more that it has a chance to grow in value over time, the more the advantages of it. Another difference, with a traditional IRA, if you still own it when you die, it can be rolled over to a spouse or other beneficiaries. A Roth IRA needs to be distributed when you die. So, advantages and disadvantages to both, but it’s something to talk to your Financial Advisor about. One or the other may be better for you. Thanks.
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