What is the best type of IRA to start for tax breaks, Roth or Traditional?
604703
Find a financial advisor you trust (through interviewing them).  They will provide good investment advice.  Both IRA's grow tax deferred (you don't pay earnings along the way).  The differences are that \n\nTraditional ira- tax write off on contributions, taxed fully when withdraw, can't withdraw b4 59.5yrs old w/o 10% irs penalty and taxed on everything\n\nRoth- all contributions are already taxed (can't use it as a write off), by the time you're 59.5 yrs old (and assuming you had the account at least for 5 yrs) everything is tax free.  You are also allowed to take out the principal at anytime w/o penalty.  Some other rules apply to fully withdraw w/o penalty (i.e. 1st home purchase, higher education, etc.)\n\nAgain, if you have little to no investment experience, DO NOT listen to those hot stock tips, Suze Orman, or whatever is on TV.  By the time you hear of those 20% returns, you're already too late (i.e. real estate).  Please, please work with a professional.
300890
In my opinion, as long as you do not try to withdraw the money early (before 59 and 1/2 years old) a roth IRA is the best vehicle for retirement if you qualify for it.  Within the roth IRA you can invest in mutual funds that focus on bonds if you would like, or more aggressive funds if you like.  You can definitely make an asset allocation that suits your needs and risk tolerance.  Hope this helps.
670584
I am 24 four years old and started a Roth IRA three years ago.  It took $250 to open an account.  After that, I set up an automatic deduction of $50 from my checking account once a month.  Aside from that, I contribute 10% of my income tax return each year.  Right now I have about $5000 in stocks.  I know it is not a whole lot, but the benefit is compounded over years instead of waiting until I am 40 to start saving.
53875
OK, you CANNOT roll a 401k account directly into a Roth IRA. You can roll your money into a Traditional IRA and avoid any taxation and penalties. (Definetly a good idea.)\n\nYou could then convert your Traditional IRA to a Roth IRA, but in doing this you would have to include the amount you convert as taxable income (pay income tax on the full amount). This may push you into a higher tax bracket, depending on your income and the size of your account.\n\nAssets in a Traditional IRA will be taxed when you withdraw them in retirement while the Roth IRA assets can be withdrawn tax free in retirement. Speak with a financial planner to help decide which choice is best for you.
839674
The first step is to save a little at a time.  For example, you could open up a savings account and put $25.00 per month in it.  Force yourself to put the money in the savings account no matter what.  Cut out anything extra that you would have done with that $25.00 for the month.  Doing that, you would save $300.00 per year.  The BIGGEST THING in this is to FORCE yourself to put over money monthly.  Your savings will slowly grow, and pretty soon you won't be able to believe how much you were able to save.   There are some high interest savings accounts out there.  I would search for the highest interest rate on savings accounts to put your money into.  The higher the interest, the more money you will make. \n\nIf you would like to save for retirement, a great option to save with is a Roth IRA.  You put money into it just like any other savings, but you can't touch the money without penalty until you are 59 1/2 years old.  The good thing about a Roth IRA is that when you take the money out during retirement, the interest you earned is tax-free. :)  That can save you a lot of tax dollars in the long run!
341439
You can beginning making withdrawals from an IRA without penalty at age 59 1/2 (you still have to pay regular income taxes, unless it's a Roth IRA).  See the following government publication:\n\nwww.irs.gov/pub/irs-pdf/p590.pdf
172733
If the mutual fund is currently held with a large fund family, you should be able to open an IRA with the fund family and have your mutual fund transfered to your new ROTH IRA.  This way it grows tax-free!  If it isn't, you could also open a ROTH IRA with a broker and then transfer the mutual fund into your new account.  If you don't want to keep the mutual fund, then you can sell it and fund a new ROTH IRA.  However, I would be sure to check and ensure that there is no penalty on the sale, and that you still have plenty of time before you will need the money so that the tax-free growth is worth doing.  Good luck
241030
It may be if they still need to save for retirement. The only concern with the roth is that the money will have to sit there for 5 years before they can get it out penalty free. Well, the earnings at least. On a short time frame the tax deferral may not make a big difference and they could use a standard taxable investment account. They should see a financial planner. Consider long term care insurance as well.
80949
I like Janus funds.  They will open an account for $500.  I have had my Roth IRA with them since the first year they were available.  After you open the account, you can make additional investments online if you want. (minimum $100 per additional investment).  There are no fees!\nhttps://ww3.janus.com/Janus/Retail/StaticPage?jsp=jsp/Account/TypesOfAccounts/RothIRAAccountType.jsp
600002
I'm a professional investor.  I highly recommend that you invest inside of a ROTH IRA.  Not only for the tax benefits, but as a young person, if you need the money for a house down payment, you can get money out of a Roth.  I would strongly consider avoiding stocks if you're a beginner.  You're competing with professionals who do this for a living and you may get lucky, but 99% of beginners *eventually* take themselves to the cleaners.  You probably don't have a ton of capital to begin with, so a diversified mutual fund makes the most long-term sense.\n\nI do recommend beginning to invest in college.  It's a great habit to form.  I did the same.  While my buddies were out buying much nicer cars and even boats with money they saved, I was socking money into a retirement account.  The difference an appreciating IRA makes in comparison with a depreciating vehicle is mind boggling.\n\nStart now.  Start simple and diversified with a mutual fund.  Invest inside of a Roth IRA.\n\nIf you really want to trade stocks, then be willing to lose 50% or more of what you're starting with.  Most people I know, do.\n\nGood luck, email me with any questions,\n\nJared
678923
My personal opinion is that you'll eventually want to open both.  But at your age, you have a long time to go before retirement, and that makes the Roth much more attractive.  The different is that, with a Roth, all the growth inside the account will eventually come back to you completely tax-free.  Since you've got many years ahead of you, your investments should have grown a great deal by the time you retire, and that will benefit you the most.\n\nLater, when you're in your 40's or 50's and your income is much higher, perhaps you'll get more benefit from putting money into a Traditional IRA and taking the deduction.  Also, it will be nice to have both types of accounts to choose from when you're retired and want to have the ability to decide which account to take money out of.  But, for now, the Roth will provide you much greater opportunity.\n\nThe second question, which you didn't ask, is "How should I invest the money inside the account?"  At your age, I'd lean heavily toward growth stocks.  Best of luck to you.
284469
You don't need to pay tax when you redraw from Roth IRA when retired. Traditional IRA only let you defer taxes.
1095905
IRA is Individual Retirement Account.  It is a retirement account.  The basic forms of IRA's are Traditional and Roth.  Traditionals are tax deferred (you dont pay taxes on the money you put into it but you pay when you take it out and any gains).  Roth grows tax-free but you pay taxes on the money prior to putting it in the Roth IRA.\n\nCD's are Certificates of Deposit.  It is basically cash that is locked up for a predetermined period of time that earns interest at a higher rate than the overnight rate you get on a basic savings account.  \n\n401's?  If you mean 401k's, they are similar to Traditional IRA's but are associated with your employer (whom will usually offer matching funds up to a certain point).  This is another retirement account.
373263
Well, if you save for retirement, you should put your money in an IRA. This helps the economy, which is why you receive tax breaks for doing so. The money you put in the IRA gains interest for yourself, which is good, and can be used in the interim by banks to loan out to consumers, in which the banks make money by charging the interest back to the consumer who initiated the loan. If you are saving money by putting it into any type of bank account, whether it be a CD, saving account, whatever... you are helping the economy. Likewise, if you don't save and just spend, you are helping the economy. If you save your money in a mayo jar and bury it in the backyard, you are not helping the economy, or yourself.
606169
Roth IRA utilizes after tax money. You can contribute up to $3000 annually. This type of investment produces tax free income later in life. Long term savings Great idea!\n\n\nConventional IRA. Uses pre-tax money. shelters some of your income. \nMaximum contribution allowances change. Check current rules.\nGo to: clarkhoward.com for lots of info
1176821
I think...your question...is kinda confusing.  There is the Tradional IRA, Roth IRA and 401(k).  I am not sure there is anything such as Tradional 401(K).\n\nif you're talking about 401(k) - you can move your 401(k) from previous employer to your current employer's 401(k) , OR if you want more options, besides 10 or so mutual funds your current employer offers ( or similar number of funds offered by your previous employer ), you will be better off, rolling your 401(k), into a ROLLOVER IRA. Of course, everytime you trade you're going to pay commissions, which may not be the case in 401(K)\n\nif you're talking about Traditional IRA to ROTH IRA : if you meet certain IRS criteria ( such as be Single, or file jointly if you're married and above all have a Adjusted Gross Income of less than 100K. )  If you think you're going to be in the same Tax Bracket as you are today or above that, when you're 50s ( i think 57 or something like that ),  you will be better off, paying taxes on your earnings in your traditional IRA, TODAY,  at your current lower federal income tax  bracket, so you don't have to pay ANYTHING in your ROTH IRA - even if grows to be Billions of $$$$.  As usual, there are the inherent benefits of ROTH IRA - you will not be required to withdraw monies from it ( with Traditional IRA you will be forced to take out money in 50s and pay taxes on it - if you don't you pay penalty ). You can pass on the ROTH IRA to your kids, etc.\n\nAs usual, consult a financial advisor, as each case varies.  \n\nOne more thing....If your considering converting traditional IRA to ROTH, be prepared to shell out taxes on your earnings/income - from out of your own pocket - DON'T CONSIDER PAYING IT OFF WITH YOUR EARNINGS/INCOMES FROM TRADITIONAL IRA - YOU WILL PAY EARLY WITHDRAWL PENALTY AT 10%
142039
Go with a 529.  Great tax advantages.  You can then pick from a ton of investment choices to place inside of the 529.  For more info - http://www.529s.com