2007-08-11 10:47:44 · 4 answers · asked by marwinstonboro 2 in Business & Finance ➔ Personal Finance
roth ira you do pay any takes on the unearned income
cons -- limit access to your money until you are 59.5
2007-08-11 12:12:55 · answer #1 · answered by Anonymous · 0⤊ 0⤋
These are two different tools, in fact you can have a CD that is a Roth IRA. Think of the IRA as a box that you can put different financial tools into to change how they are taxed. You can have cd's, stocks, bonds, mutual funds, annuities and more that are Roth IRA's. Just keep in mind these are for retirement and if you take the money out early you will be penalized in most cases.
Use the Roth IRA for Retirement savings. If you follow the rules, all the earning in the Roth IRA will be income tax free after you reach age 59 1/2 and have had the account for at least 5 years.
Find a good financial planner you trust to help you make the best decisions.
2007-08-11 18:09:34 · answer #2 · answered by Darn Dave 2 · 1⤊ 0⤋
I could ask "Is there any advantage of a 401(k) through work over buying the funds the 401(k) offers". This is essentially the same question you asked. This is not even an 'apples to oranges' comparison. It is more like comparing the produce department to apples.
Darn Dave is correct.
2007-08-11 18:59:18 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
Earnings (interest) from a Roth IRA are tax free. Interest from a CD you have to pay taxes on.
2007-08-11 17:52:34 · answer #4 · answered by Gary 5 · 0⤊ 2⤋