Here are a few factors to consider when you making your retirement income strategy:
When it comes to paying taxes on contributions, Roth IRAs and traditional IRAs differ from one another. While both are tax-advantaged accounts, your choice will impact when you pay taxes on the money: With a traditional IRA, you’d pay taxes in retirement when you begin taking payments. With a Roth IRA, however, you’re required to pay taxes on the money in advance.
Furthermore, Roth IRAs do not require RMDs (required minimum distributions) during the owner’s lifetime. This makes a Roth IRA a “wealth-transfer vehicle” because you can pass the entire account and its tax benefits onto your heirs.
Call us if you would like to discuss funding either of these types of accounts, as we have some ideas that may benefit you. We’re always here to help.
