Traditional or Roth IRAs
There is no “right” answer, but there are key similarities and differences that you should know. Once we go through the fundamental aspects, I will give you some specific factors to weigh for you to apply to your situation.
Similarities Between Traditional and Roth IRAs
Differences Between Traditional and Roth IRAs
As a Financial Advisor here are the questions that I would be asking you:
- What is the gross income on your tax return?
- You Should Know: There are income limits that adjust annually with inflation that restrict high income earners from being able to participate in a Roth IRA. Check those income limits here.
- What is your tax bracket?
- You Should Know: There are no income limits for participation in a Traditional IRA, however your income could prohibit you from receiving a tax-deduction for your Traditional IRA contribution. Check those income limits here.
- Do you have additional retirement investments?
- You Should Know: Being intentional about planning how your assets will be taxed in retirement will give you more flexibility as you take distributions from accounts in retirement years.
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