Traditional vs Roth IRA: This video covers a complete guide on Traditional and Roth IRA’s by explaining the similarities, differences, and which one would be better for you using a real world example. Enjoy!

How To Become A Tax Free Millionaire | Roth IRA Investing

⏰ Timestamps ⏰
00:00 Intro
00:18 Similarities
02:18 Differences
07:48 Which Is Better?

💻 My Website:

🔑 Discord Private Memberships:
🌐 Money Talk Hub:

📱 Follow Me
Danny’s Money Talk
Twitter:

📕 Books I Recommend 📕
MONEY Master The Game by Tony Robbins:
Macroeconomics by David A. Moss:
Rich Dad Poor Dad by Robert T. Kiyosaki:
The Intelligent Investor by Benjamin Graham:

🎞 How I Make My Videos 🎞
My Camera:
Microphone:
Lighting:
Money Art:
My Music:

📝 What is an IRA?
An IRA is an individual retirement account which means both of these accounts discussed in this video contain some sort of tax advantage.

Traditional IRA:
A Traditional IRA has the tax incentive of giving you a potential tax deduction on what you contribute (based on retirement plans). The money you use with a traditional IRA is called pre-tax money and the account is known as “tax deferred” because you will eventually have to pay all the taxes one day.

Pros:
1. Potential tax deduction
2. No income limit (can use for backdoor Roth)

Cons:
1. Required Minimum Distributions (RMDs)
2. May not get tax deduction
3. Everything eventually taxed (ordinary income rate)

Roth IRA:
A Roth IRA has the tax incentive of giving you the ability to pay taxes today (after-tax money) to then have an investment account that can grow and be withdrawn one day (59.5) tax-free!

Pros:
1. Growth is tax free
2. Withdrawal after 59.5 and hold for 5 years then tax free
3. No RMDs
4. Backdoor Roth IRA if higher income
5. Can withdrawal contributions tax free and penalty free

Cons:
1. Income Limit
2. Must pay taxes upfront (After-tax money)

Don’t let time keep passing, let your money work for you. If you found any value in this content please consider hitting the like button and subscribing as I continue spreading the highest quality content related to “money talk” to impact as many lives as possible.

Sources:
IRS Deduction Limits:
Fidelity IRA Limits:
Fidelity RMDs:
Schwab IRA Guide:

🔔 Don’t forget to subscribe with notifications on and hit that like button!

Disclaimer: The information provided in this video does not, and is not intended to, constitute legal, tax or financial advice; instead, all information, content, and materials available on this video and on this channel are for general informational purposes only. I am not an attorney, accountant or financial advisor. Viewers of this video should contact their attorney, accountant or financial advisor to obtain advice with respect to any particular legal, tax or financial matter….(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

If you’re looking to invest for your retirement, then you’ve probably heard of traditional and Roth IRAs. While both types of IRAs are designed to help you save for your golden years, there are some key differences between the two. In this article, we’ll explore the differences between traditional and Roth IRAs to help you decide which one is better for you.

What is a Traditional IRA?
A traditional IRA is a retirement account that is tax-deferred. This means that you won’t pay taxes on the money you contribute to your IRA until you withdraw it during retirement. Contributions to traditional IRAs are tax-deductible, which means that you may be able to lower your taxable income by contributing to your IRA. However, once you begin taking withdrawals from your traditional IRA account in retirement, you will be required to pay taxes on the full amount of your distributions.

What is a Roth IRA?
A Roth IRA, on the other hand, is a retirement account that is tax-free. This means that your contributions are made with after-tax dollars, but you won’t pay taxes on your distributions during retirement. In other words, you don’t get an immediate tax benefit from contributing to a Roth IRA, but you won’t pay any taxes when you withdraw money from your account in retirement. Additionally, Roth IRAs offer more flexibility than traditional IRAs, as there are no required minimum distributions (RMDs) and you can make contributions at any age.

Which is better for you?
Choosing between a traditional and Roth IRA largely depends on your current and future tax situation. If you’re in a higher tax bracket now and expect to be in a lower one during retirement, then a traditional IRA may be the better option for you. By contributing to a traditional IRA, you will receive an immediate tax deduction and pay taxes on your distributions during retirement when you are likely to be in a lower tax bracket. However, if you expect to be in a higher tax bracket during retirement, then a Roth IRA may be the better choice. By contributing to a Roth IRA, you forgo the immediate tax deduction but will pay no taxes on your distributions during retirement when you are likely to be in a higher tax bracket.

Overall, there is no clear “winner” between traditional and Roth IRAs, as both have their own unique advantages and disadvantages. It’s important to consider your own tax situation and long-term retirement goals when choosing between the two. If you’re still unsure which type of IRA is best for you, it may be helpful to speak with a financial advisor who can help you make an informed decision based on your individual circumstances.