How to Choose Between a Traditional IRA or Roth IRA
A common question financial planners are asked is, “What’s the difference between a Traditional IRA and a Roth IRA?” Followed by, “Which one is best for me?”
In this installment of The Cautious Investor, Jean DeAngelo, private client associate with W3 Wealth Management in Warren, tells what the difference is and how you can choose which one is best for you.
Anyone with earned income that is younger than 70½ can contribute to a Traditional IRA. Roth IRAs don’t have age restrictions, but they do have income-eligibility restrictions that tend to fluctuate from year to year.
Both traditional and Roth IRAs provide generous tax breaks, but it’s a matter of timing when you get to claim them.
“With traditional IRAs you avoid paying taxes when you put the money in, but you’re taxed at ordinary income levels when you take it out,” DeAngelo says. “With a Roth IRA you won’t have to pay taxes upon withdrawal of the funds in retirement, but contributions are made with after-tax dollars.”
Watch the video above to learn more.
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W3 has offices in Akron, Warren, Beachwood, and Columbus with clients in over 25 states. We utilize screen-sharing technology so our out of state clients receive the same service as our local clients.
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