How come the GOP the small gov party ( yes I am lol at that ,too) havent changed the law so that we are not dependent on the government?

If anything good Obama has done, its proven to the American people that socialism is for losers

Consider Jackson who earns a $65,000 annual salary. Jackson is currently in the 25% tax bracket and contributes $3500 a month to his Roth IRA. Jackson would therefore pay income taxes of $3500 x 25% = $875 and would contribute $3500 – $875 = $2625 to his Roth IRA. If Jackson expects to be in a 33% tax bracket upon retirement, he will have to pay $3500 x 33% = $1155 upon his retirement. Therefore by making after-tax Roth IRA contributions now and getting taxed at the lower 25%, Jackson avoids having to pay taxes @ 33% when he hits retirement.

Source: http://www.definerothira.com

And that is indeed the beauty of Roth IRAs. If you expect to be in a higher tax bracket when you retire, it is best to pay taxes now and get it over with. Besides, you do not want to build your retirement savings tax-deferred only to be hit with taxes when you retire, you do not want to owe a single dime to Uncle Sam!

These are far better than mutual funds in that the mutual carry much expenditure which they do not tell you but only deduct from the returns. I have seen in my personal experience that mutual funds are the last best performers in a volatile market. With changing global trends and business we can expect a lot of volatility in the stock markets and this will beat the mutual funds heavily to feed the fund managers and their lifestyles. Roth IRA takes care of all kinds of market scenarios without feeding someone’s belly. Treat it as a non-touchable safe investment until an emergency comes.

Some people use mutual funds. Even theno-load funds have 12b-1 fees. Always, and I mean, always learn how much of your investment will be devoured by fees.

Look at performance of your investment vehicle. The Roth IRA IS NOT the investment vehicle, what you put into it is. Some people buy stocks while others buy mutual funds. Again, you should not only know the costs but the performance history of the investment.

Compare the Roth against other like programs. Which one stacks up best? Will it continue to stack up 5, 10 years down the road? Maybe, maybe not but if it wins today, it’ll probably win tomorrow.

Above all, do your homework.

From what I understand, for the great majority of people the Roth is going to come out ahead over a traditional IRA as far as the purposes of long term investment go. The loss of deductibles you eat on the annual contributions really become small fries when you compare that money to a healthy investment account that’s had a few decades to let compound interest catapult it into field of massive returns. The ability to then pull all that money out without any taxation is pretty hard to beat.

That said, the traditional IRA probably can still be used effectively for more near to middle term investment horizons, such as family emergency planning like KJones was talking about.

We were lucky to have this option and it was smart of my husband to opt in at his place of employment. My husband contributed directly from his payroll check each week to his IRA and his employer kicked in on the investment. It was a real help for our family emergency, but we did receive a penalty.

This is very interesting. I imagine that you would need to be very devoted, and moderately financially stable in the first place, for the ROTH IRA to work well in your security plan.

Before cashing in on the funds, I believe you need to be over 59 years old and your account needs to be at least 5 years old for you to reap the full benefits.

I am curious if there is a higher yield for this modified IRA.

I wonder if this would be an ideal way to leave a sum of cash family as an inheritance upon your death.