I am interested in purchasing a ROTH IRA. What are the benefits for having this type of retirement plan?
A ROTH IRA is a good plan of investment for retirement for some people. First of all, not everyone can contribute to a ROTH because of the IRS imposed income limits. Your tax preparer can help you determine if you qualify.
In short, there are several benefits of a Roth. These are:
- Money may grow tax free; withdrawals are tax free, also,
- There are no minimum required distributions to take at certain ages.
- If properly handled correctly, a ROTH left to heirs is tax-free. Do the proper estate planning to take advantage of this benefit.
- There is great tax flexibility in retirement by being able to diversify.
- They can help reduce or even avoid the Medicare surtax.
- A ROTH becomes a hedge against future tax hikes.
- At retirement, you can use your contributions at any time with no taxes or penalties.
- If you are older, you can continue to contribute to a ROTH as long as you work. In many cases, if you keep working, you can continue contributing to the ROTH.
- If you are younger, your income is likely to rise, thus allowing for more contributions to a ROTH and helping you better prepare for retirement.
One very important thing to remember is that the Minister’s Retirement Fund (as well as other 403(b) type plans) allow for a ROTH contribution. This could give a person the BEST of both worlds in investing for the future. Contact the MRF staff for more information regarding this subject to determine how it would benefit you.