The Importance of a Roth IRA Retirement Plan

Investing

By David Dodge, Guest Contributor

The road to retirement is, undoubtedly, one of the most difficult phases of life that you can plan for.  A long, seemingly endless journey, retirement is only accomplished by years of thorough planning and eternal savings.  In today’s world full of financial planners and managers, there is an abundance of different retirement options that claim to provide you with the best road to retirement.

While many financial plans do prove to offer a variety of retirement benefits, there are only a few options that are clearly the best.  By researching the various retirement plans, you will quickly discover that a Roth IRA is probably the best route to go.

Anyone Can Have a Roth IRA        

Created for individual people, one of the great things about a Roth IRA retirement plan is that it does not have to be sponsored by an employer.  Because employers administer the majority of retirement plans, it can be difficult for certain people to open a retirement plan.

For example: if you’re unemployed or self-employed, without the creation of a Roth IRA, there’s a good chance that you wouldn’t be able to start a retirement plan at all.  This retirement option allows you to save for the future at your own pace and schedule your own retirement.  You might prefer this arrangement instead of being locked in to a designated monthly contribution amount.

A Diverse Retirement Plan

Out of all of the advantages that a Roth IRA provides, two of them stick out above the rest.  The main benefit that this plan provides is diversity.  Unlike a lot of retirement plans, a Roth IRA allows you to invest in just about every type of security; stocks, bonds, mutual funds or ETF’s.

The second best advantage to a Roth IRA is quite simple and it relates to the taxes on your plan.  With this option, as your savings grow, they do so tax free.  This is a huge comfort that a Roth IRA gives you as you know that there are no taxes being charged on your investment.  Of course, there are more than two advantages that a Roth IRA provides:

  • If you’re ever faced with an unfortunate crisis, while there is a charge for early withdrawal, the money does not count against your adjusted gross income.
  • For the reason of an unforeseen emergency, you are allowed to take out the money without it increasing your reported income bracket.

The uniqueness of the Roth’s investment option gives you the ability to prepare for a comfortable retirement.

 

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