A Roth IRA account:
• Is a retirement savings account for after-tax savings
• Your money will grow tax-free, and you can make qualified withdrawals during retirement without taxes or penalties
• You are eligible to contribute if you make less than $153,000 for singles, or $228,000 for couples who are married and filing jointly.

A Roth IRA account can be a good savings option for you if:
• You expect to be in a higher tax bracket when you retire
• You’re saving into a traditional IRA or 401K and want to diversify your savings
• You’re already maxing out your 401K matching and your HSA account

But, a Roth IRA account may not be your best savings option if:
• You expect your income to decrease in retirement
• You’re not maxing out your 401K matching and HSA
• You’re a young professional or entrepreneur far from retirement age

Before you solidify your savings plan for 2023, talk to your financial advisor about the best, most tax-friendly options available to you. The savviest savings option for your situation may surprise you! At Cook Wealth, our expert team of financial advisors offer more than just financial planning, tax advising, and wealth management. We help you live life empowered.

Every day we help clients just like you make the best decisions now, plan for tomorrow, and build a legacy that lasts for decades to come. Because life isn’t just about money, it’s about the special moments we savor along the way.

To demystify your money, simplify your financial plan, and start making progress towards your biggest goals, contact Cook Wealth today.

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As the year 2023 approaches, one may be wondering whether contributing to a Roth IRA is still a wise decision. Roth IRA, a type of individual retirement account that offers tax-free withdrawals in retirement, has been a popular choice among savers for years. But is it still the best option for your financial goals?

Firstly, it’s important to understand the main benefit of a Roth IRA- the tax-free withdrawals. Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax money, meaning that withdrawals in retirement are not taxed. This can be a significant advantage, especially for those who anticipate being in a higher tax bracket in retirement.

Another benefit of a Roth IRA is the flexibility in withdrawals. Unlike traditional IRAs, Roth IRA owners can withdraw contributions at any time without penalty or taxes, making it a useful option for emergency funds.

However, there are certain limitations to consider before deciding whether to contribute to a Roth IRA in 2023. Firstly, there are annual contribution limits set by the IRS. For the year 2023, the contribution limit for both traditional and Roth IRAs is $6,000, with an additional catch-up contribution of $1,000 for those age 50 and over. This limit may be a hindrance for those who wish to contribute more to their retirement savings.

Secondly, the eligibility for contributing to a Roth IRA is determined by income. For 2023, the income phase-out range for single filers is between $141,000 to $156,000, and for married couples filing jointly, it’s $223,000 to $233,000. Those who exceed these income limits are not eligible to contribute to a Roth IRA, making it a less attractive option for high earners.

Lastly, it’s important to consider one’s overall retirement plans before deciding to contribute to a Roth IRA. For some retirees, the tax-free withdrawals might not be as advantageous as they once thought, especially since income from other sources may push them into a higher tax bracket. In such cases, a traditional IRA or other tax-deferred retirement accounts may be more beneficial.

In conclusion, contributing to a Roth IRA in 2023 depends entirely on your individual financial situation and goals. While the tax-free withdrawals and flexibility in withdrawals are attractive, the contribution limits and income limitations should be carefully considered. Consulting with a financial advisor can be helpful in determining whether a Roth IRA is the best option for your retirement savings.