Should I invest in a Roth? ?
I have heard mixed reviews about investing but I am not for sure if it’s the right way to go. Help?
- kswck2Lv 72 months ago
Rather than go into how a Roth works, it is essentially FREE money for you when you retire-no taxes. BUT, you have to be consistent and Keep investing.
- ?Lv 72 months ago
A Roth is a certain tax type classdification for your retirement funds. It is NOT an investment vehicle.
- AmyLv 72 months ago
The question comes down to which is higher: your tax bracket right now or your tax bracket during retirement?
A traditional retirement plan delays some of your income from the year you earned it to a time when you are retired. Because the US tax system is "progressive", spreading income over extra years often results in a lower tax.
Meanwhile you invest the money and do not pay tax on the investment income.
A Roth plan does not delay the tax liability but does keep the benefit of no tax on investment gains. You pay income tax when you earn the money, same as if you didn't put it in any retirement account, and then never have to deal with tax again.
Using a Roth makes sense for people in entry-level jobs who currently have lower income than they expect to have during retirement. It also makes sense when tax rates overall are unusually low, as they are right now (we're in a temporary tax cut and racking up debt that will have to be repaid).
Using a traditional account makes sense for people currently at the high point of their career, or for people who expect to have no other income during retirement.
Finally, if your employer matches contributions to a 401(k) but it doesn't have a Roth option, do it anyway. That is free extra money.
- Anonymous2 months ago
Regular Investing is a great idea. They did not have roths when I was young. My regular IRA has done fantastic. But I will owe taxes when I take some out. If it was a roth, I would not.
Of course, I will probably die before I take money out of my IRA.
What "mixed" reviews could you have heard unless its some idiot that bought penny stocks and lost his money?
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- JudyLv 72 months ago
Yes is a good idea. Allows you to save for retirement with no income tax on your gain.