Since I started as a financial advisor I have had so many people ask me the same questions, “What is the difference between a Roth IRA and a Traditional IRA?” I am going to lay out the basics below on the difference but be sure to ask someone for help if you want to make sure you are making the best financial choice for your situation.
To start off with, an IRA is an investment account that is used to grow our investments without the earnings being taxed by the government so we keep more of our money. In regards to a Roth vs. Traditional IRA it mostly comes down to how much you can contribute, how the accounts are taxed and your income.
Below is a brief chart comparing a Roth IRA vs. a Traditional IRA:
In the end, opening up an IRA or utilizing your 401(k) through work is a great idea to create passive income in their old age so you can live the life you want. Even if you do not want to retire down the road, by saving now and utilizing these tax advantage accounts you are creating wealth for the future that will help in achieving your future goals.
There is a lot of information out there when it comes to investing, retirement and taxes. The links included in the above chart will also be of some guidance that will expand on what is covered above.
If you still have questions about your situation and would like someone to walk you through it, please contact me. I want to help and would be happy to sit down with you in person or over Skype to figure out the best plan of attack for you.
Steven LaFleur attended college at the University of Nebraska-Lincoln where he majored in finance. After college, he worked in his family’s business. After three years Steven decided it was time to pursue his passion; helping and educating younger generations on money, planning, and finances. Steven is now a financial advisor at True Measure Wealth Management in Omaha, NE. Steven and his wife Kelly have two daughters who keep them busy at all times of the day. Steven enjoys skiing in the mountains and also biking and golfing during the non-snowy months. As a junior advisor, he’s passionate about helping the younger generations plan for their future. For more of Steven’s insights subscribe below.