This video looks at Traditional IRA vs Roth IRA. Roth IRA and Traditional IRA are the two most common retirement plans. The differences between a Traditional IRA vs a Roth IRA are important to understand. This video will cover Traditional IRA basics as well as Roth IRA basics.
NEW! Join Our Private Community:

The Trading App I Use (moomoo):

★☆★ Subscribe: ★☆★

Investing Basics Playlist

Investing Books I like:
The Intelligent Investor –
Common Stocks & Uncommon Profits –
Understanding Options –
Little Book of Common Sense Investing –
How to Value Exchange-Traded Funds –
A Great Book on Building Wealth –
Dale Carnegie –
Effective Speaking –

Equipment I Use:
Microphone –
Video Editing Software –
Thumbnail Editing Software –
Laptop –

DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.

#LearnToInvest #StocksToWatch #StockMarket…(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

In 2018, the U.S. tax code underwent significant changes, affecting various aspects of personal finance, including retirement planning. One of the key areas impacted by the new tax laws is individual retirement accounts (IRA), particularly Roth IRAs and Traditional IRAs. For individuals looking to maximize their retirement savings, understanding the differences between these two retirement vehicles and how the new tax laws affect their contributions and withdrawals is crucial.

Let’s start by clarifying the basic differences between Roth IRAs and Traditional IRAs. Traditional IRAs allow individuals to make pre-tax contributions, meaning that the money invested in the account is tax-deductible in the year it is contributed. This allows for immediate tax savings. However, withdrawals from a Traditional IRA in retirement are taxed as ordinary income.

On the other hand, Roth IRAs require after-tax contributions, meaning that the money is contributed with already-taxed dollars. However, the major benefit of a Roth IRA is that qualified withdrawals in retirement are tax-free, including the earnings accrued over time. This makes Roth IRAs a particularly attractive option for individuals who anticipate being in a higher tax bracket during retirement or who want to maximize tax-free income in retirement.

The 2018 tax changes brought about several updates that directly impact both Roth and Traditional IRAs. One of the most significant changes affects the ability to recharacterize contributions. Pre-2018, individuals were allowed to recharacterize a contribution from a Traditional IRA to a Roth IRA or vice versa if they wished to change the tax status of their contributions. However, the 2018 tax changes have eliminated this option, meaning that once a contribution is made to a specific type of IRA, it cannot be recharacterized.

Additionally, the 2018 tax changes expanded the income limits for Roth IRA eligibility. Now, individuals who are married and filing jointly can contribute to a Roth IRA as long as their modified adjusted gross income (MAGI) is less than $189,000, with a phase-out starting at $179,000. For single filers, the income limit is $120,000, with a phase-out starting at $120,000. This change has made Roth IRAs accessible to a larger portion of the population.

With the new tax laws in place, individuals need to carefully consider their retirement saving strategies. For those who may be in a higher tax bracket during retirement or who want to diversify their tax exposure, Roth IRAs may be a more appealing option. On the other hand, individuals who are looking for immediate tax savings and anticipate being in a lower tax bracket during retirement may still find Traditional IRAs more suitable.

Ultimately, the decision between Roth and Traditional IRAs depends on individual financial circumstances, long-term retirement goals, and current and future tax implications. It is important for individuals to consult with a financial advisor or tax professional to determine the most advantageous retirement savings strategy in light of the 2018 tax changes.