Roth vs Traditional IRA’s

Roth and Traditional Ira’s-a topic of a great deal of discussion.  I have written previously about these differences in a recent Investing 101 post.

This subject is still “greek” to a lot of folks, if my discussion with my nurse friends is any indication.

Comments like, “What the hell were you talking about-I didn’t understand a word you were saying!”  Or, “you lost me when you started discussing the different stock   indexes like the Russell 2000, what the heck is that?  Is that similar to a Jack Russell Terrier or something??????

So my goal is to continue to break these investments issues into small segments, and allow things to sink in.

As I was taught by the senior residents, when I was an intern-Practice, Practice, Practice-we are only letting you admit every patient for the next 72 hours, because we are here to help you learn!!!

So I taped this video, the same day I taped the one about  opening a local brokerage account, at a bricks and mortar office-something that intimidates a lot of folks.

In this video today, Hal, a registered broker is discussing a few of the differences between Roth IRA’s and Traditional IRA’s.

Take Home Points in  the Roth/Traditional IRA decision tree:

• Both are better than neither.
• They offer a way to put away more money for retirement, than you might be able to put into your work IRA
• They are more in your control than your 401-K or similar work accounts-the choice of investments is almost endless!
• The Roth IRA is more limited by income as to who is eligible
• The Roth is usually considered non-deductible but is tax free on withdrawal
• The traditional IRA is a tax deduction for most eligible folks but is taxed  on withdrawal.
• But as I said in the first bullet point-either one is better than nothing!!!

If you have any questions, please feel free to let me know.

I will do a  few posts soon-interviewing a CPA-with their  thoughts on these issues from a tax standpoint.  As  soon as they get over tax season-Tax season to a CPA is much like Christmas shopping season to a retailer, it is good for the bottom line, but heck on your Family Life!!!!

Thanks again to Hal, and Julie at Warren and Brannen Inc. for their assistance.

Tags: advantage of Roth IRA, Comparing roth and traditional Ira's, Roth IRA's, Traditional vs Roth IRA

This entry was posted on Thursday, April 15th, 2010 at 11:14 am and is filed under Personal Finance 101, Retirement savings, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.