When the time comes to make a withdrawal from your retirement savings account you don’t need to worry about paying taxes on it (assuming you meet certain additional requirements.).
It’s the perfect investment for those who want to pay now, and not worry about it later.
There are a few rules, guidelines, and advantages of a Roth retirement account:
The most important difference between Roth IRAs and traditional IRAs is the timing of your tax break. With a traditional IRA, your contributions are tax-deductible. With a Roth IRA, your withdrawals are not taxed. Typically, you’d choose a Roth IRA if you think your tax rate will be higher in the future, and a traditional IRA if you think your tax rate will be lower in the future. However, there are federal eligibility requirements that may ultimately determine which type of IRA you are eligible for.
There are a number of factors to consider when choosing whether to open a traditional or Roth IRA. You don’t have to go to a big bank to open an IRA account. Here at Liberty, we can help you decide which one is right for your financial situation.
No, Illinois specifically excludes Roth IRA distributions from state taxable income and does not tax the conversion of a traditional IRA to a Roth IRA. Wondering how to start a Roth retirement account? Simply stop in a branch or contact us today to discuss your IRA options and open a Roth IRA!