🔍 Key moments in this video:
(0:00) Introduction
(0:17) Types of IRA’s
(01:06) – Taxation Differences
(02:03) – Roth IRA Benefits
(03:19) – Traditional IRA Con’s
(4:21) – Required Minimum Distribution

📈Investment Planning key points:
– Roth IRA’s grow Tax-FREE with no Tax Deduction
-Traditional IRA’s are 100% Taxable with a Tax Deduction and follow RMD withdrawal guidelines.

➡️ Read more Financial Strategy articles on our website:

📚 Get Bruce Porter’s Book: “Finding the Courage to Retire,” available for Kindle or paperback:

You can contact our trusted financial advisors at The Resource Center by calling 417-882-1800, sending an email at info@resourcecenterinc.com, or fill out a brief contact form at

Facebook:
Instagram:
Twitter:

Transcript:
Bruce Porter: (00:17)
What is the different kind of types? We just finished the tax season and we had a lot of people right at the end there, put some money in IRAs. Depending on your situation, if you need a deduction or not. I think understanding both types is important. We talk about them a lot, but I’m amazed at how many people that come in really just don’t understand how they work. So I thought we would cover the basics. When we’re looking at traditional IRAs, you know, the key to a traditional IRA is you have a tax deduction for your contribution.

Bruce Porter: (01:06)
If you’re in a 15% tax bracket and you put $2,000 in a traditional IRA, it’s going to save you $300, or it’s going to increase your refund by $300. Right? So you can look at it, both directions now, uh, it’s a, it’s definitely a way to have systematic savings out of sight, out of mind. Right? So if you just got $150, 200, $300 a month going into a, uh, your IRA account, right. Outta your checking account, and you’re doing that on your own. Good for you. That’s what you should do. Your maximum limit under age 60 or under age 50 is $6,000. If you’re above age 50, you have a catch-up provision. That allows you to put $7,000 in.

Bruce Porter: (02:03)
Roth IRA. No deduction at the front side. So you don’t like the traditional, you don’t get a tax deduction, but the key to that is the principle, the growth, the future ACU value, everything in that account is tax-free forever to you, to me and you Tom when we inherit Joy’s Roth IRA. If she’s nice to us. Everything’s tax-free to your children, to your grandchildren, to anyone you want. There are lots of different flexibility options for that. But if you’re a young person right now, you’re listening deductions aren’t as important when you’re younger put as much as you can systematically in a Roth IRA and build you a portfolio for the rest of your life, it’s going to be tax-free, right?

News Anchor 1: (03:13)
Yeah. All right. What are the pros and cons of each

Bruce Porter: (03:19)
Right? So the traditional IRA, you have to make a withdrawal out of that, right now at age 72. When you’re approaching older age and a lot of people don’t want to take any money out, you’re forced to take a required distribution out of your traditional IRA at age 72. Consult your tax people about the timing of that and all that, it’s a hundred percent taxable when it comes out. So if you leave it to your children, your grandchildren, it’s a hundred percent taxable to them. We used to stretch IRA’s out over the beneficiary’s lifetime, but now you have to take the distribution within 10 years.

Bruce Porter: (04:21)
If you’re old enough and you’re taking an RMD, I have to continue taking the RMD and I have to take the distribution within 10 years. So I would say that would be a con to future IRA. I’ve told people jokingly a bad day is when you retire with a million dollars or 401k. Cause you’ve got a huge tax liability, in the future good days when you retire with a Roth IRA of a million bucks. Right. And so what’s the con of a Roth IRA. Well, uh, younger folks, you need to leave it there to your 59 and a half. It’s not tax-deductible on the front side.

Bruce Porter: (05:07)
That, it’s, everything’s tax-free from that point on the growth, the principle, all of that stuff. So I think we gotta listen to that.

News Anchor 2: (05:14)
Okay. And there are conversion options. If you wanna convert your traditional to a Roth, you can get a tax consultation at the resource center.

Investing involves risk, including the potential loss of principal. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC, (AEWM). AEWM and The Resource Center are not affiliated companies. Paid For By The Resource Center 1308509-04/22

#IRA #RothIRA #TraditionalIRA…(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