Retirement Savings: What is a Roth IRA?
The IRA rules around income limitations for converting Traditional IRA money to a Roth IRA have changed. Learn more about the Roth IRA conversion changes and how they might benefit your retirement savings.
When funding your retirement savings, it’s a good idea to diversify, using the various retirement investment options available to you. And now, those with high incomes are able to take advantage of the benefits of a Roth IRA, thanks to changing income rules around converting money from a Traditional IRA to a Roth IRA.
What is the difference between a Traditional IRA and a Roth IRA?
The most basic difference between these two individual retirement accounts has to do with when you pay taxes. With a Traditional IRA, money you contribute may be tax-free while money you withdraw in retirement is taxed. A Roth IRA is the opposite—money you contribute is after tax and money you withdraw in retirement is tax-free. This, along with other differences, can make it valuable to have both of these retirement savings accounts as part of your overall retirement plan.
Read More About: Is A Roth IRA Conversion Right For You?
Related Articles: