Roth IRA vs. Traditional IRA

[steelheader13]

Let's discuss.

[Pipe_Dream]

Traditional - contributions deductible, withdrawals at retirement taxable.

Roth - contributions not deductible, withdrawals tax free.

Unless you need the tax deduction now, Roth is generally the better way to go, IMHO.

Did I leave anything out? I'm sure I could write reams more. Any specific questions?

[steelheader13]

I really need to start an IRA, as my company does not offer a 401k.

The tax break now sure would be nice (Traditional), not sure if my tax bracket will be higher in 20 years than my current bracket or not. Crystal ball sure would be nice.

I read on kiplinger's that if I invest $4,000/yr in a traditional, I would have the same amount of money available at retirement if I invest $3000 in a Roth after paying the taxes on withdrawal of the traditional.

6 of one half dozen of the other I feel.

My income level may push me into a Traditional anyways.

[Pipe_Dream]

I'm an optimist -- I feel certain that my tax bracket will be higher in 20 years. ;D I'm also a pessimist -- I have no faith in D.C. lawyers and feel certain that tax rates will be significantly higher in 20 years. >:( So I switched contributions to a Roth 4 years ago.

The main thing is that you contribute to something, either one. Waaaay too many folks have nothing socked away for retirement.

[Stinky_Hooker]

I am totally dumb in this area so this may sound stupid, but how do I go about opening one? Like a bank or something?

the retirement plan here sucks as well. ::)

[TheTinMan]

I am totally dumb in this area so this may sound stupid, but how do I go about opening one? Like a bank or something?

the retirement plan here sucks as well. ::)


pretty sure you use a chainsaw to open one up??? ;D

[labii]

A lot is based upon your age . The younger you are the more attractive the Roth , as it will have many years to grow tax free . If you are in your mid 40's + , most likely you will be better served with the deduction up front and the tax deferal on the growth . And yes you start to phase out around $100k in income to be elligable for a Roth contributionn .

[Pipe_Dream]

I am totally dumb in this area so this may sound stupid, but how do I go about opening one? Like a bank or something?

the retirement plan here sucks as well. ::)
If you have a retirement plan at work you may not be eligible to make IRA contributions, too.

You can open an IRA at your bank, or any brokerage house. Check out www.fidelity.com for info, or pick another.

Voice over, "Please consult your tax advisor before making any retirement plan decisions." ::)

[Franco]

Y'all know what they say:

Jesus Saves

Moses Invests!!!