Traditional IRA vs. Roth IRA
Here is some general information regarding IRAs.
In the arena of personal savings terms IRA and Roth IRA are thrown around. IRA stands for Individual Retirement Account. Basically, it’s a savings account with a few strings attached when accessing the money. Also there are different types of accounts that can be used as an IRA. Financial planners and securities salespeople might say mutual funds and variable annuities are the best. Insurance Advisors, like Middendorf Insurance, will offer the alternative view of a fixed annuities and equity indexed annuities.
Traditional IRA – An account that uses money that hasn’t been taxed yet, or pre-tax dollars, and grows tax deferred. When it comes time to take the money, taxes are owed on all the money.
Roth IRA – An account that uses money taxes have been paid on, or after-tax dollars, and grows tax deferred. When it comes time to take the money.
Basically with a Roth IRA taxes are paid now and with a traditional IRA taxes are paid later. It’s like the old Fram Oil Filter commercials, “pay me now, or pay me later.”
What is the best fit? No one knows. Financial Planners and people on TV will promise the glory and growth of a mutual fund or variable annuity. That is not always the best fit.
As Insurance Advisors, Middendorf Insurance only offers insurance products. Every dollar paid in will be there when needed. An insured IRA will never be less valuable than what was invested. Insurance Advisors at Middendorf will make sure you’re really covered, that includes retirement.