It’s never too early, or too late, to start saving for retirement. Whether you have already started saving or not, you may wonder what options are available to you. Two popular retirement savings vehicles are the traditional IRA and Roth IRA. It’s important to work with your financial advisor to understand which option is best for you and your circumstances, but, like most things related to investing and retirement, it’s always important to start your retirement program as early as possible. Starting early and sticking with a plan is one of the key determinants of providing for your future.
We have detailed some key features of traditional IRAs and Roth IRAs below to help you get started:
For more information, visit the IRS website https://www.irs.gov/retirement-plans/plan-participant- employee/retirement-topics-ira-contribution-limits.
Consult your Southwestern Investment Group advisor today for a more detailed overview of income and contribution limits, depending on your filing status.
Tax considerations
The main difference between a traditional and a Roth IRA is the taxation. A key consideration is whether you are likely to be in a higher tax bracket now versus when you are retired. If you think you will be in a higher tax bracket now, then deferring your taxes until later may be preferable. If, however, you expect to be in a higher tax bracket later, you may lean toward a Roth IRA and the benefit of tax-free withdrawals in your retirement years.
At Southwestern Investment Group, we are committed to helping our clients plan for retirement. Regardless of what vehicle you choose, the earlier you start saving, the more you will benefit down the road. Contact your advisor today to determine which retirement savings strategy is best for you.
