No 401K? Try a Roth IRA.

by Karen


Roth IRA: A retirement savings alternative


If you are interested in kick-starting your retirement savings, a Roth IRA may be right for you. As opposed to many other types of retirement accounts, the money you put into your Roth IRA has already been subjected to income taxes. Because of this, once you reach age 59 1/2, you may make tax-free withdrawals from the account. Also, unlike many other savings accounts, the interest earned on a Roth is tax-free.

Roth IRAs generally invest in common stocks or mutual funds. If you’re under age 50, the government will allow you to contribute up to $5,000 this year to your Roth. If you’re age 50 or older, you can put in up to $6,000. (For both age groups, this is $1,000 more than was allowed last year.)

Here are some links to Web sites providing information on Roth IRAs, including the advantages and disadvantages of a Roth versus a traditional IRA:

www.rothira.com

www.retireology.com


www.irs.gov/retirement/article/0,,id=137307,00.html

www.fairmark.com/rothira/roth101.htm

Are any CoolSavings Community members retired and collecting from a Roth IRA? Care to share with us how it’s working out? Would you have saved your money any differently if you could go back? We’d love to hear your thoughts and insights!