What are the benefits of a Roth IRA?
One of the benefits of a Roth IRA is that the money you invest in a Roth IRA grows tax-free, so you don’t have to worry about reporting investment earnings—the money your money makes—when you file your taxes. By comparison, if you invest in a nonretirement account, your earnings are subject to federal, state, and local taxes each year. 2.
Can a high earner contribute to a Roth IRA?
The only way for a high earner to still contribute to a Roth IRA is to use a backdoor Roth IRA strategy. And, finally, the earlier you start contributing to a Roth IRA, the greater the tax advantages. You have more years to grow your earnings on a tax-deferred basis and more money to withdraw tax-free in retirement. Benefits of Roth IRAs for kids
Is the Roth IRA still a good investment?
Consider the Roth IRA. The account’s key features have barely changed since it was rolled out in 1997. That’s not necessarily a knock. In fact, it could be considered an accomplishment because, all these years later, the benefits of the Roth continue to serve consumers well.