I already have some money in my savings account, but I want to have a secondary savings that I don't plan on accessing until it's time for retirement. Which type would be the best? Are the contributions pre-taxed? How does it affect my taxes at the end of the year? Thanks for the help!
2007-08-14 11:23:46 · 5 answers · asked by Kismet 7 in Business & Finance ➔ Personal Finance
You should go with a Roth IRA.
You dont get a current year deduction, but all the funds you withdraw are tax free (at least now, who knows in the future). You can also pull that $$ out for a house in the future.
2007-08-14 11:29:06 · answer #1 · answered by Corruptfile34 5 · 0⤊ 0⤋
Since you are only 25 your most likely in a lower tax bracket now then you will be upon withdrawing savings from the IRA account. I would recommend an IRA, which contributions are taxed but withdrawals after a certain date are not. You might pay 15% taxes on your contributions now rather than with a Roth IRA which is tax-deferred in which you might have to pay 25% taxes by that time.
2007-08-14 11:29:21 · answer #2 · answered by cradduck205 2 · 0⤊ 0⤋
since you did not say what you taxes status -- here is what i would do i would max out my regular ira -- this your get right off the top at tax time -- if you do this change your w-4 and raise your deductions by two -- than if you have any money left over put into a roth ira == up to max 4k == in your rainy day savings you have a start but i would insure you had from 4 -6 months of money in fact your get put out of work -- it is such a pleasure to answer questions like this instead of "how do i get out of debt" keep savings and good luck!!!
p.s. you can open either account for as little as 28.99 at your bank because i did it for my niece!!!,
2007-08-14 11:40:42 · answer #3 · answered by Anonymous · 1⤊ 1⤋
roth
2007-08-14 11:27:36 · answer #4 · answered by Anonymous · 0⤊ 1⤋
with money in it
2007-08-14 11:31:13 · answer #5 · answered by Anonymous · 0⤊ 2⤋