Two IRAs are available - the traditional and the Roth.
Which is best for you?
With a traditional IRA, you generally invest pretax dollars, and your earnings grow tax-deferred.
With a Roth IRA, your contributions aren’t deductible, but you can typically withdraw your earnings tax-free once you’re 59½ and you’ve had your account at least five years.
Taxes and penalties apply to both types of IRA if you withdraw earnings before you’re 59½.
If you think you’ll be in a higher tax bracket when you retire, you might want to consider a IRA.
Conversely, if you think you might eventually be in a lower tax bracket, you might lean toward a traditional IRA.
With a traditional IRA, you’ll eventually have to take withdrawals or face penalties.
But you can keep your Roth IRA intact and even pass it on to your heirs.
You may not be able to contribute to a Roth IRA if your income exceeds certain levels.
Income limits don’t apply to a traditional IRA if you and your spouse have no retirement plan available through an employer.
Compare the two IRAs carefully - and make the choice that’s right for you.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson and Hawes Dickerson. Members SIPC.
