Plan For Retirement With A Roth IRA

Great retirement benefits and bonuses used to come standard with just about any job, but these days even the most loyal of workers are seeing their retirement packages pulled out from under them. At least companies are honest to new employees: they can forget about even being promised any retirement help.

More and more people are working past what used to be retirement age not only because they?re go-getters who would feel bored without a job, but because so many people can?t afford to sustain themselves without working income. When you struggle just to pay the bills, how do you plan for retirement? When you can no longer count on your employer to help you out after you retire, to whom do you turn?

Make plans for your retirement now with a Roth IRA account or annuity. Ask a financial advisor or investor to help you set up a Roth IRA. You probably think that you can?t afford it, but if you don?t want to be working well past the retirement age, you have to find a way to set aside some money for retirement now. As there is a maximum amount you can contribute each year, a Roth IRA can be surprisingly more affordable than you think.

The primary benefit of a Roth IRA as opposed to other kinds of IRA accounts is that income from the Roth IRA is often federal tax-free for qualified distributions. When you are eligible to receive your Roth IRA distributions, you will not have to pay any tax on the income, as the money you are allowed to contribute to a Roth IRA account each year is already taxed.

When are you eligible to receive these tax-free distributions from your Roth IRA? When you reach the age of 59 ? or if before then you become disabled, you can take tax-free distributions from your Roth IRA account at any time and for any reason. If you are the beneficiary of someone else?s Roth IRA, you can typically receive the distribution without any taxes.

Can?t imagine putting aside so much money for retirement when you?ll probably need it before then? There are qualifying one-time events for which you can take a penalty- and tax-free distribution of your Roth IRA, such as buying your first home or sending a child or even yourself to college.

What, then, are some disadvantages of a Roth IRA? There is a 10% tax penalty for taking money out of your Roth IRA before you are eligible. Still, this penalty could motivate you all the more to resist the temptation to spend this money and to instead save it for your retirement.

Also, unlike with traditional IRA accounts, your contributions to Roth IRA accounts are not tax deductible. However, the most important advantage of investing your money in a Roth IRA is to maximize your savings for retirement and not necessarily to help your financial situation now.

It may seem strange to start worrying about saving for your retirement when you?ve still got so many bills to pay now. But you won?t have any fewer bills when you hit retirement age?in fact, you may have more. Will you want to keep working to pay your bills or enjoy your well-earned time off? The Roth IRA can make it easier for you to retire before the age of 75! For more information on the advantages of a Roth IRA and the latest Roth IRA news, visit rothira.com or irs.gov.

frank j vanderlugt owns and operates http://www.roth-ira-2007.com Roth Ira