Traditional & Roth IRAs
Flexible Retirement Solutions for Every Stage of Life
Individual Retirement Accounts (IRAs) are one of the most powerful tools available to help individuals save for retirement. Whether you’re just beginning your savings journey, supplementing an employer-sponsored plan, or planning for tax-efficient retirement income, IRAs offer versatile options tailored to your financial goals.
Both Traditional IRAs and Roth IRAs provide unique benefits—and choosing the right one depends on your current financial situation and your future retirement plans.
Traditional IRA: Build Your Nest Egg with Immediate Tax Benefits
A Traditional IRA offers the opportunity for tax-deferred growth, allowing your investments to compound over time without being taxed until you begin withdrawals in retirement.
Key Features:
- Immediate Tax Deduction: Depending on your income level and participation in an employer plan, contributions may be fully or partially deductible from your taxable income for the year you contribute.
- Tax-Deferred Growth: You won’t pay taxes on earnings and gains until you withdraw the money, ideally when you may be in a lower tax bracket.
- Contribution Limits: For 2024, individuals can contribute up to $7,000 per year (or $8,000 if you are age 50 or older).
- Required Minimum Distributions (RMDs): Starting at age 73, you must begin withdrawing minimum amounts each year.
Who Might Benefit:
Individuals who expect to be in a lower tax bracket during retirement than they are today.
Roth IRA: Tax-Free Growth and Withdrawals
A Roth IRA offers a compelling advantage: tax-free income during retirement. With a Roth IRA, you contribute after-tax dollars today so you can enjoy completely tax-free withdrawals later.
Key Features:
- Tax-Free Growth: All investment gains grow free from federal taxes.
- Tax-Free Withdrawals: Withdraw your contributions and earnings tax-free in retirement, provided certain conditions are met (account must be open for at least 5 years and you must be age 59½ or older).
- No RMDs: Unlike Traditional IRAs, Roth IRAs do not require minimum distributions during the account holder’s lifetime, giving you greater control over your retirement income and estate planning.
- Contribution Limits: Up to $7,000 annually (or $8,000 if you are 50 or older) for 2024, subject to income limitations.
- Income Limits: Eligibility phases out at higher income levels (consult current IRS guidelines for details).
Who Might Benefit:
Individuals who expect to be in a higher tax bracket during retirement, younger savers, and anyone wanting flexible, tax-free income during retirement.
Shared Benefits of Traditional & Roth IRAs:
- Available to Individuals Regardless of Employment Status: Whether you are employed, self-employed, or even taking a career break, you can contribute as long as you have earned income.
- Flexible Investment Choices: IRAs offer a broad range of investment options, including stocks, bonds, mutual funds, ETFs, and CDs, so you can tailor your portfolio to your personal risk tolerance and retirement timeline.
- Supplement Existing Retirement Plans: IRAs can enhance other retirement strategies, such as 401(k)s, offering additional tax advantages and financial security.
Why Adding an IRA to Your Retirement Strategy Makes Sense
- Diversify your retirement savings
- Access tax benefits now or in retirement
- Gain more control over how your money is invested
- Maximize your retirement income potential
📞 Ready to Take Control of Your Future?
Whether you’re opening your first IRA or evaluating whether a Traditional or Roth account is right for you, we’re here to help.
Schedule your free retirement planning consultation today!