Quote:
Originally Posted by protour73
so let's talk Roth IRA's . . . . Good idea?
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Are you married? Single? You'll have to go off of income here too.
Are you married and file jointly? Do you make more than $181k combined on the joint tax return? If so then legally, no Roth for you.
But now lets look at tax brackets. I believe by going over the $160k mark will put you into the next tax bracket. Because of this if you make over the $160 mark it's not worth doing the Roth and you should go Traditional - my opinion from my research and speaking with our Tax Accountant.
The basics between Roth and Traditional:
The money going into a Roth has already been taxed. Example, you get a paycheck, you then take the money that's already been taxed in said paycheck and place it into your Roth. When you retire and take money out you're then taxed just on the gains. You can also take the money you put into the Roth out at any time with no penalty.
Traditional comes out of your paycheck and goes into the IRA pre-taxes. So when you retire and you take this out you pay taxes on all of this.
With that being said, what is your tax bracket now? What will your tax bracket be when you retire? Higher tax bracket when you retire? Then do Roth now if you can, lower when you retire? Then do Traditional now? (with everything else said above in consideration)
If you CAN do a Roth, do it. I believe the max per year is also $5k per person for a personal Roth, if your IRA through work is a Roth there is no limit for coming out of your paycheck if not mistaking.