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Definition of the Week: Roth IRA
Investment Knowledge from Stockbrokers.com
Roth IRA
What is a Roth IRA? A Roth IRA is the single most popular type of Individual Retirement Account. The Roth IRA is distinguished from other IRA types by the fact that qualified distributions may be taken from the plan tax-free. Unlike the Traditional IRA contributions to a Roth IRA are not tax deductible, but earnings are accrued tax-free, which is a huge plus.
Stockbrokers.com Explains a Roth IRA:
A Roth IRA gives an individual tons of financial flexibility. There are countless investment options that can be bought inside a Roth IRA, so no matter your investing style, a Roth IRA should be suitable for you. The IRS has raised annual contribution limits over the last few years, which has made this account an even more attractive investment option. As of 2011, those who are under the age of 50 can contribute the lesser of $5,000 or their taxable compensation for the year. Those 50 and older can contribute the lesser of $6,000 or their taxable compensation amount. Being able to invest and pay taxes only once (when you first put the money in) is a tremendous deal that makes the Roth IRA well worth your investment dollars.
2 Responses
My fedility investment is roth ira conservative. Is this a good idea or not? For one year the free interest is only $2.00 something which i figured that is not what i want to put my money on my retirement.
Any advised please!
Hi Emily, with the market crashing the last few weeks, a conservative investment style is a fantastic choice. You can’t expect to get a huge return on cash right now because interest rates are zero. As far as Fidelity, they are a very good broker. Please check out their review page for further information and broker comparisons, http://www.stockbrokers.com/review/fidelityinvestments.
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