Day Insurance Agency Inc. Helps You Compare Roth and Traditional IRAs
Roth IRAs vs Traditional IRAs is a key decision when planning for retirement. At Day Insurance Agency Inc., we guide clients through the important differences between Roth and Traditional IRAs. Each offers unique tax advantages, income rules, and withdrawal requirements. Understanding these differences helps you choose the option that aligns with your financial goals.
Roth IRAs Use After-Tax Dollars and Provide Tax-Free Withdrawals in Retirement
When you contribute to a Roth IRA, you use money you’ve already paid taxes on. In return, your withdrawals—both contributions and earnings—are tax-free after age 59½. This option works well if you expect to be in a higher tax bracket later.
Traditional IRAs Offer Tax Deductions Now but Taxes Later
A Traditional IRA allows you to deduct contributions from your taxable income, depending on your income and whether you have a workplace retirement plan. However, you’ll pay taxes on both contributions and earnings when you withdraw them in retirement.
Required Minimum Distributions Vary Between the Two
Traditional IRAs require you to start taking required minimum distributions (RMDs) at age 73. Roth IRAs do not require RMDs during your lifetime, giving you more control over your retirement savings.
Income Limits Can Impact Your Eligibility
Roth IRAs vs Traditional IRAs contribution rules vary by income. Roth IRAs have income restrictions that may limit your ability to contribute. Traditional IRAs do not have income limits for contributions, but your deduction may be limited based on income and participation in a workplace plan.
Let Day Insurance Agency Inc. Help You Make the Right IRA Decision
Choosing between a Roth and Traditional IRA depends on your financial situation and retirement goals. Day Insurance Agency Inc. will help you assess your options and develop a retirement plan tailored to your future.
Not sure which retirement account fits your future? Call us at (724) 228-3448 in Washington, PA or (724) 356-7700 in Hickory. Let’s talk about Roth IRAs vs Traditional IRAs.
