As promised to be included in this series on retirement, here are facts that you need to know about Traditional and Roth IRA, as the two most popular types of IRAs. Check this episode and learn more about your journey to financial freedom.
[4:2] Difference between Traditional and Roth
● Traditional IRA is pre-tax similar to a 401k while,
● Roth IRA is typically tax-free or after-tax
[7:20] Until when can I contribute for tax year 2018 and what are the contribution limits?
● You can contribute up to April 15, 2019
● 2019 limit increased to $6,000 from last year’s $5,500, if you are under the age of 50
● If you are 50 or older, this year’s limit is set to $7,000
[9:5] Pieces of advice we gathered from other resources
● It’s better to get a Roth IRA because your taking the taxes and not be taxed upon retirement
● If you’re being taxed on a Roth IRA now, there’s basically less money to tax compared to what you will be paying in the long run