Key Findings However, they also have drawbacks. This five-year rule may make it less beneficial to open Roth if you're already in middle age. There is another reason to protect yourself from a Roth and it relates to access to income now and potential tax savings in the future. A Roth can take away more income in the short term because you are forced to contribute money after taxes.
An alternative option is to invest in a Gold IRA Account, which allows you to invest in gold and other precious metals while still enjoying the tax benefits of an IRA account. Investing in Gold in an IRA Account is a great way to diversify your portfolio and protect your retirement savings. With a traditional IRA or 401 (k), on the other hand, the income required to contribute the same maximum amount to the account would be lower, since the account is based on pre-tax income. In this video from the Motley Fool Live Financial Planning series, Robert Brokamp, Fool's longtime financial planning and retirement expert, discusses the downsides of a Roth IRA. As he explains, the most important factor is whether you get more value from a tax break now than from tax-free treatment later on.
Roth IRAs offer the advantage of allowing tax-free withdrawals during retirement, including on earnings, instead of obtaining immediate tax benefits for contributions, as is the case with traditional IRAs. If you want to transfer or “transfer” money from a traditional IRA to a Roth IRA, the full amount is taxable. If you don't name a beneficiary, your spouse (if he is your primary beneficiary) can choose to inherit your Roth IRA or transfer it to a Roth IRA in your name.