Freedom During Retirement

Roth IRA and Traditional IRA

Want to retire while benefiting from the income that you’ve generated from investments over the course of your life? Roth and Traditional IRA’s are for those who want to live off the fruits of their dedicated career work after retirement.

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Roth IRA vs Traditional IRA

Not sure what the differences are between a Roth IRA and Traditional IRA? We’ve got you covered.

Roth IRA

If you want to enjoy tax-free withdrawals upon retirement, a Roth IRA may be the choice for you. Everything contributed to your Roth IRA throughout your life is taxed before entering the account, so you won’t have to worry about losing a chunk of what you see on paper once you’ve decided to claim it all in retirement.

Traditional IRA

With a traditional IRA, your contributions made to it as you go are tax deductible, but you are taxed on the total value of your account when you take it out.
Not sure how to pick the right retirement plan for you? Take a look at the next section.

Federal income tax laws are complex and subject to change. Neither Nationwide nor its representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions.

How to Decide Between a Roth or Traditional IRA

The following can help you decide whether you will want to set up a Traditional or Roth IRA:

Decide which tax benefits you’d enjoy more.

A traditional IRA would give you tax breaks now while a Roth IRA saves those tax breaks for retirement.

Consider early withdrawal penalties.

You’ll see a different set of rules and penalties for withdrawing from each of these accounts before you turn 59 ½.

Factor in benefits upon retirement.

Decide how long you’d like your money to be invested into an account and how much you want to give your beneficiaries. These can help you decide which account can help you accrue more money.

Look at your current and projected tax bracket.

Generally, those in a low tax bracket would be better off going with a Roth IRA, especially if you’re in the early stages of your career. For those closer to retirement in a higher tax bracket, a Traditional IRA is usually the better option.

If you’d like more help deciding which account will set you up best for retirement while also taking into account your current needs, speak with one of our qualified registered representatives by requesting a quote.

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