I am thinking of openning an individual Roth IRA account. Will be putting maximum amount under the income limit to the account every year. Can someone tell me what the pros and cons are in this scenario?
I am thinking of openning an individual Roth IRA account. Will be putting maximum amount under the income limit to the account every year. Can someone tell me what the pros and cons are in this scenario?
I like being alone, I just don't like being lonely.





Pros: Income and growth in the Roth are tax free because it is post tax dollars.
Cons: No current tax deduction.
I just opened a fidelity account. They told me that my voice was recorded and used for verification purpose. Now, the technology gets a bit scary.
I like being alone, I just don't like being lonely.
Just keep in mind that you do not want to have to use the money you are putting in until age 65. The penalties for early withdrawal are stiff.





I don't think there is any penalty for withdrawing what you contributed, only on any interest, dividends or capital gains earned.





You can always withdraw your contributions tax free. You can withdraw income and growth tax free over age 59 1/2 if the Roth has been open five years or more. There are contribution limits too. So, the plan is contribute the maximum to your Roth IRA. Then save more outside the Roth. That way, you have access to the excess saving while maximizing your tax advantage for retirement.
Also, start saving early. The earlier the better. The magic of compound interest!
HTH
Z
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