Author: Randy Taylor
Randy Taylor Financial Services
Creative Commons Copyright 2012
http://finsecurity.com/RTaylor
Which IRA do I choose? A Roth I.R.A. or a Tax Deductible Traditional I.R.A. ?
There is no hard and fast rule on this since we cannot predict what federal and state income rates
will be in the future. The Traditional I.R.A. gives you the benefit of a tax deduction now; while still
allowing you to defer claiming any income on the earnings within your account. Theoretically,
this also allows you to take the money that would have been used to pay current income taxes; and
invest that was well.
With the above benefits of a Traditional I.R.A., why consider a Roth I.R.A. at all?
The Roth I.R.A. gives you a key benefit in that when you do take income distributions in the future; they
will free from income taxes. The longer you live and take income; the better the Roth I.R.A. starts to sound.
If you feel that your future income tax bracket will be higher than it is now; than the Roth becomes more attractive.
In addition, If you want to pass this account onto your heirs or defer taking income until after age 70.5; you are not subject to the penalty that the traditional I.R.A. creates if the income is taken after age 70.5
For a complete chart comparing alternatives for I.R.A. accounts, refer to the chart link below. However,please see your tax advisor first; and also your attorney and/or financial counselor.
refer to the simple yet comprehensive chart below, which is included in my website documents:
Roth Versus Traditional I.R.A. 2012 reference chart below:
http://finsecurity.com/finsecurity/pdfs/RTaylor/2f4-14.pdf
Randy Taylor Financial Services has helped consumers for over 29 years; and other financial professionals for 10 of those years. We do not give tax or financial advice. Please see your tax advisor, attorney, or financial consultant. Randy Taylor can be reached at the phone numbers below:
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Website: http://finsecurity.com/RTaylor
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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270
