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Message
re: Someone Tell Me About Roth IRAs (New ? on Pg 3)
Posted on 8/31/12 at 12:42 pm to CoolHand
Posted on 8/31/12 at 12:42 pm to CoolHand
ok .... not to hijack the thread .... but can someone pretend that im a 2nd grader who failed coloring book class and explain to me ( in kiddie words ) the slow mans answer to the OP's question? better yet , pretend im a caveman that transported from the past having knowledge of only two words ... bone and cook .... and break down for me what the hell Roth IRAs are , why or why not an individual should invest in one, and how one can acquire it.
4
Posted on 8/31/12 at 1:16 pm to crosswood
Check out Flask's responses. We should get one so we can retire and have money to travel and do cool shite when we're old.
Posted on 8/31/12 at 1:16 pm to crosswood
quote:
and break down for me what the hell Roth IRAs are
an investing vehicle that allows tax free gains and income.
quote:
why an individual should invest in one
because you aren't taxed on your gains
quote:
why not an individual should invest in one
If you plan on losing money, you can't deduct your losses?
Posted on 8/31/12 at 1:18 pm to crosswood
It is a retirement investment vehicle. It allows you to put in after tax $ (money you have once you has paid your taxes), that grows over time. The growth is not taxed, and you can withdraw the money without paying taxes. Think of it as a farmer: you pay your taxes on the seed, and get the harvest tax free.
Posted on 9/2/12 at 2:38 pm to crosswood
quote:
why or why not an individual should invest in one, and how one can acquire it.
You can open an account at almost any financial institution or brokerage. You get no deduction on your current taxes for the contributions that you make. The payoff comes when you start withdrawing your money because you pay no tax on the money you withdraw even though it presumably has appreciated over the years to be worth far more than your original contributions.
With a standard IRA the contributions are tax free but the withdrawals are not. With a Roth IRA the earnings are tax free provided you have reached 59-1/2 and you have held the account for five or more years.
Incidentally, distributions from a Roth IRA to your heirs are also not taxed. Additionally, there is no required minimum distribution when your reach 70-1/2.
This post was edited on 9/2/12 at 2:43 pm
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