Investment vehicles like a Roth IRA and any employer sponsored Roth option you may be offered should definitely be part of your investment plan for retirement. If you don’t have an investment plan for retirement, Best Roth!: A Beginner's Guide to Roth IRAs, Employer Roth Options, Conversions, and Withdrawals will help you come up with one that minimizes your risk and maximizes your profits.
If you have a Roth option in your 401(k), 403(b), 457, 401(a), or other defined contribution plan at work—fantastic. Not all employers offer a Roth option. (Some offer no option at all.) By all means, take advantage, but you’ll still want to open up and fund a Roth IRA for a variety of reasons. Take advantage of all the tax breaks Uncle Sam gives you.
Why? Everything else being equal, you’ll earn a higher rate of return in tax advantaged accounts than you would in regular taxable ones. As you invest over the years, returns are amplified by those advantages.
These investment vehicles are the low hanging fruit as far
as your retirement savings goes. You’ve got to max them out the best you can
and integrate them into a single investment plan for retirement. Combine that
tax advantaged plan with low investing fees and you’ve got one of the most
effective investing tools on the planet.
Are you a novice investor who’s just getting started? Maybe you want to help your kids save for retirement and become more financially literate? Best Roth! provides the information and insight to jumpstart your prosperity and get you on the road to financial freedom.
Roth investments enjoy tax free earnings. The longer your time horizon for investment, the more you’ll benefit from tax free earnings. As the years go by, you’ll add other pre-tax (traditional) investments to the mix, which will also add value to your investment plan for retirement.
The trick is to integrate all of those tax advantaged
accounts into a single investment plan, one with built in risk management
strategies that maximize your profits and minimize your risk.
Think you can’t contribute to a Roth IRA because you’re over the income limits? Think again. In fact, you may be able to fund your Roth IRA on a yearly basis well above the contribution limits. It’s a little trick I like to call the Ole’ Roth IRA Switcheroo.
It may sound a little sneaky and underhanded, but it’s
totally legit. You may be able to execute a switcheroo from your employer’s
retirement account, a traditional IRA, or both. I update this book every year
so you’re assured of receiving the most up-to-date tax and employer retirement
plan information that will help keep you one step ahead of the pack.
As a financial educator, I get asked all kinds of Roth-oriented questions:
Can I tap my Roth IRA before age 59 1/2 without tax or penalty?
My employer offers both a traditional and Roth option. Should I be making Roth or traditional contributions?
Should I roll my old company plan into my present employer’s plan or an IRA?
My employer offers a Roth option: Why should I still invest in a Roth IRA?
Are there any downsides to converting after-tax non-Roth contributions to my Roth IRA from my company’s plan or from a traditional IRA?
I’m interested in converting money to a Roth IRA. How much
tax will I owe, and when is the best time to do it?