This is yet another post I am making about one of my favorite topics, investing. We know that a traditional IRA is tax deferred yet will have taxes paid on it during retirement. A Roth IRA grows tax free and has tax free withdrawals pending certain conditions met. But why a traditional? There are some that argue that taxes are going up, which is probably true. Personally, I like both types of IRAs. With a Roth, you pay current income tax on contributions that have not even made any earnings yet. That alone will tend me to favor tax deferred traditional. A traditional IRA will earn more over time with the power of compounding without the hassles of annual taxes hitting it. Like I said before, why not get a low low paying job after you leave your main job so that you are now in a lower tax bracket? Instead of maybe 25% tax on withdrawals, now you will only pay 10-15%. See the difference? All that money has grown without annual taxes. Now pay as little as possible on earnings.
2007-05-26
11:17:45
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1 answers
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Anonymous
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