Barry Bulakites Blogs

Roth and traditional IRAs share a lot of similarities, with the fundamental difference between the two involving the payment of taxes.  Image source:   mymcmedia.org In a traditional IRA, individuals take their contributions out of their pretax income and the investment grows with the incurred taxes deferred until money has been withdrawn.  On the other hand, Roth IRA, which was named after former Senator William Roth who authored the Taxpayer Relief Act of 1997, is funded after an individual’s salary has been taxed. Contributions are not tax deductible and qualified distributions when withdrawing from the account is tax free.  Because of this difference in tax treatment, contributors would have to consider carefully which account to use.  The tax rate is shifting continually. If they believe that the rate would be higher than it is now, they should consider opting for a Roth IRA because future withdrawals are tax free and they would n...

Individual retirement accounts, or IRAs, came into existence decades ago because of the steady decline of defined benefit pension plans. People wanted to control how they saved money for retirement and IRAs were just the thing to do so.But not only did IRAs give control to individuals, they also provided some very attractive advantages. Image source: richtertriallaw.com People went for traditional and Roth IRAs more than any other IRAs because of the benefits both types offered. A perfect example of which was tax-free growth. These IRAs earn money and grow, and no taxes are levied on the dividends and capital gains. It’s also a huge convenience that the contribution deadlines are the same. People with traditional and Roth IRAs can contribute to the IRA for the entire calendar year, up until April 15 of the succeeding year. Contributions depend on several factors, along with the personal preference of the individual. People should note that after-tax money comp...