Roth IRA or Traditional IRA- pros and cons

Didn't the weekend fly?  They all do.  I trust you had a good Labor Day.  Back to work, drats.

In case you've wondered what the differences are between a Roth IRA and a Traditional IRA, I'm listing some below.  Either way, an IRA is a great way to save for Retirement, which I hope you are doing.

ROTH IRA-Advantages

• protects retirement earnings by having an early withdrawal penalty
• there is no mandatory withdrawal age
• all earnings and contributions are 100% tax free when withdrawn
• principal can be withdrawn at any time without penalties
• available to single filers with income up to $95k
• married couples with combined income of up to $150k

ROTH IRA-Disadvantages

• money put in (principal) is made after taxes are paid (not tax deferred)
• it does not lower your income on taxes when filed
• contribution limit is $5k per year

TRADITIONAL-Advantages

• what you put in lowers your taxable income when you file
• earnings grow taxfree
• protects your retirement money by having an early withdrawal penalty

TRADITIONAL-Disadvantages

• earnings are taxed at withdrawal
• contribution limit is $5k per year

Hope this helps.  I did the Roth, since you can withdraw principal (what I put in) without a penalty.  I also like the fact that all of money in the account is tax free when I take it out.


Bible verse:  Proverbs 28:20


A faithful man will abound with blessings, but he who makes haste to be rich will not go unpunished. 
 
Have a great day!