Benefits of a Roth IRA
Let’s face it, we’d all prefer instant gratification, right? So, we tend to make decisions that get it for us. Think fast food and Amazon overnight delivery.
But we all also know that making decisions that pay off better in the long run – can be smarter.
It’s similar to the benefits of putting money into a Roth account. You’re contributing money that’s already been taxed, so no instant gratification there. But when it’s time to withdraw that money later in retirement you won’t pay any more taxes on it, not even on the growth it’s built up over time. That’s a long-term benefit.
So, why can it be better to pay taxes on Roth money NOW instead of LATER?
A few reasons: You’re betting that either you’ll be in a higher tax bracket later in life or, that taxes will be higher then, or both. So, you’re essentially betting on yourself – and protecting against future tax increases.
