Eligible Families who make under $120,000 combined are eligible to open a Roth IRA account, however if you exceed that limit, you must open a traditional IRA instead. If you're eligible for a Roth IRA, here are 3 more reasons why you should invest in your retirement.
1. Earnings grow Tax-Free - Imagine being taxed on your Roth contributions, but not having to pay a dime in taxes once you withdraw the money. No matter how it is invested, you skip out on the tax man! This is the number one reason to engage in a Roth IRA.
2. Don't Rely on 401(k) and Pensions - With inflation hovering at around 3% annually, the US dollar loses spending power every year. This is why you cannot solely rely on your pension plan and 401(k) contributions to take care of you come retirement. Invest in yourself and diversify your retirement investments. That way, if one dries up, you can still retire and not have to work ever again.
3. Take Advantage of Privileges - A tax-free vehicle is a privilege in this country, which is surrounded by debt-holders. Please take advantage of this program, if you can, before the laws may change or some other stick gets in the way. I'm not saying the Roth IRA will be eliminated, but if you wait too long, any compound interest gains will shrink over time. So get educated now!
Tarik Pierce is a long-term value investor who blogs on his investment blog, Investor Trip. He currently holds stocks, bonds, mutual funds, and domains names as his primary investment vehicles. He has previously documented a long list of Roth IRA banks where you can pick the perfect account for you. Visit his site to compare the best Roth IRA accounts.
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