One of the paths to financial independence is understanding your investment options and the tax consequences associated with them. Learn about IRA vs. Roth IRA in easy to understand terms!

***
Hi, I’m Patti Handy, Financial Coach | Certified Executive Coach | Author.
Discover how I help divorced, widowed and single women take control of their wealth.
***

In my combined 20 years as a Financial Advisor and Mortgage Advisor, I’ve had countless conversations with women around money. Many expressed embarrassment and shame, a sense of overwhelm when it came to investing, and a general lack of financial confidence. That stops here, and now. 
As a single mom who has gone through a divorce, I am all too familiar with the challenges of solo parenting. From bringing up my son to running the household and overseeing finances, it can be an exhausting experience. Balancing the responsibilities, while trying to carve out time for myself, was no easy task. I’m here to help you navigate soaring solo and gaining the financial confidence you crave.

#shorts #financialfreedom #financialcoach #financialliteracy #financialplanning #divorce…(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

Individual Retirement Accounts (IRAs) and Roth IRAs are popular retirement savings accounts that offer tax advantages to help individuals save for their golden years. While they serve the same purpose of helping people save for retirement, there are key differences between the two that are important to understand.

IRA stands for Individual retirement account, while Roth IRA is a specific type of IRA. Both accounts allow individuals to contribute money to them on a regular basis, which then grows over time through investments in stocks, bonds, and other financial instruments. The main difference between the two is how they are taxed.

In a traditional IRA, contributions are usually tax-deductible, meaning that individuals can deduct the amount they contribute from their taxable income for that year. The money in the account then grows tax-deferred, meaning that individuals do not pay taxes on the growth until they withdraw the money in retirement. However, withdrawals made in retirement are taxed as ordinary income.

On the other hand, contributions to a Roth IRA are made with after-tax dollars, meaning that individuals do not get a tax deduction for their contributions. However, the money in the account grows tax-free, and withdrawals in retirement are also tax-free. This can be a significant advantage for individuals who expect to be in a higher tax bracket in retirement.

Another key difference between a traditional IRA and a Roth IRA is that traditional IRAs have required minimum distributions (RMDs), meaning that individuals must start withdrawing money from their account by a certain age, usually 72. Roth IRAs, on the other hand, do not have RMDs, allowing individuals to let their money continue to grow tax-free for as long as they like.

When deciding between a traditional IRA and a Roth IRA, individuals should consider their current tax situation, their expected tax situation in retirement, and their investment goals. It is also worth noting that there are income limits for contributing to a Roth IRA, while traditional IRAs do not have income limits for contributions.

In conclusion, IRAs and Roth IRAs are valuable tools for saving for retirement, each offering unique tax advantages. By understanding the differences between the two, individuals can make informed decisions about which account is best for their financial situation. Ultimately, both accounts can help individuals achieve their retirement goals and secure their financial future.