Financial Focus Is Roth IRA better for young workers? But the two IRAS differ greatly in how they are taxed. Traditional IRA contributions are typically tax-deductible (subject to income limitations), and any earnings growth is tax-deferred, with taxes due when you take withdrawals. With a Roth IRA, If you're in the early stages of your career, you're probably not thinking much about retirement. Nonetheless, it's never too soon to start preparing for it, as time may be your most valuable asset. So, you may want to consider retirement savings vehicles, one of which is an IRA. Depending on your though, your contributions are never tax-deductible home. Nonetheless, you may still want to be cau- income, you might have the choice between a tradi- - instead, you contribute after-tax dollars. Any earn- tious about tapping into your IRA for your spending tional IRA and a Roth IRA. Which is better for you? ings growth is tax-free when withdrawn, provided There's no one correct answer for everyone. But the more you know about the two IRAS, the more confident you'll be when choosing one. First of all, the IRAS share some similarities. You can fund either one with many types of investments when you're young, you may have particularly - stocks, bonds, mutual funds and so on. And the contribution limit is also the same - you can put in up to $6,000 a year. (Those older than 50 can put in an additional $1,000.) If you earn over a certain amount, though, your ability to contribute to a Roth IRA is reduced. In 2021, you can put in the full S6,000 if your modified adjusted gross income (MAGI) is less than S125,000 and you're single, or $198,000 if you're married and file jointly. The amount you can contribute gradually declines, and is eventually limited, at higher income levels. penalty on withdrawals from the money you con- tributed (not your earnings), and you've already paid the taxes, so you could use the money for any purpose, such as making a down payment on a you've had your account at least five years and you don't take withdrawals until you're at least 59½. So, which IRA should you choose? You'll have to weigh the respective benefits of both types. But needs before you retire, since IRAS are designed to provide retirement income. If your income level permits you to select a Roth or traditional IRA, you may want to consult with your tax advisor for help in making your choice. But in any case, try to max out on your IRA con- compelling reasons to choose a Roth IRA. Given that tributions each year. You could spend two or three you're at an early point in your career, you may be in a lower tax bracket now than you will be during retirement, making the tax-deduction of traditional IRA contributions less beneficial. So, it may make sense to contribute to a Roth IRA now and take tax- free withdrawals when you're retired. Also, a Roth IRA offers more flexibility. With a traditional IRA, you could face an early withdrawal Financial Advisor. penalty, in addition to taxes, if you take money out before you're 59½. But with a Roth, you'll face no decades in retirement and your IRA can be a valu- able resource to help you enjoy those years This article was written by Edward Jones for use by your local Edward Jones Edward Jones, Member SIPC Edward Jones Sean P. Asiala AAMS Edward Jones Michael C. Caley AAMS Pam Covington CFP" AAMS Edward Jones Edward Jones Tod Heisler AAMS Edward Jones Jason Korner CFP Edward Jones Quinn Nofziger Edward Jones Gwen Ruppert Edward Jones Karen Rupert Financial Advisor 7329 West Jetferson Blvd Fort Wayne. IN 46804 Financial Advisor 414 S. Scom Rd. Fort Wayne. IN 4E814 Financial Advisor Financial Advisor Financial Advisor Financial Advisor 7030 Ponne inverness Way. Sute 125 Fort Wayne, IN 46804 432-3613 Making Sense of Investing Financial Advisor 14413 linois Rd Ste Fort Wayne, IN 46814 Financial Advisor 7127 Homestead Rd, Suite C Fort Wayne, IN 46814 karenruperteedwerdjones.com 263-4760 Making Sense of Investing 901 Chestrut Hils Parkway Fort Wayne, IN 46814 7525 West Jetferson Bivd. Fort Wayne, IN 46804 6525 Corstitution Dr. Fort Wayne. IN 40804 625-5700 Making Sense of wvesting 432-0304 Making Sense of investing 478-8038 Making Sense of Investing 444-3134 Making Sense of Investing 399-5853 Making Sense of Investing 625-3524 Making Sense of Investing Financial Focus Is Roth IRA better for young workers? But the two IRAS differ greatly in how they are taxed. Traditional IRA contributions are typically tax-deductible (subject to income limitations), and any earnings growth is tax-deferred, with taxes due when you take withdrawals. With a Roth IRA, If you're in the early stages of your career, you're probably not thinking much about retirement. Nonetheless, it's never too soon to start preparing for it, as time may be your most valuable asset. So, you may want to consider retirement savings vehicles, one of which is an IRA. Depending on your though, your contributions are never tax-deductible home. Nonetheless, you may still want to be cau- income, you might have the choice between a tradi- - instead, you contribute after-tax dollars. Any earn- tious about tapping into your IRA for your spending tional IRA and a Roth IRA. Which is better for you? ings growth is tax-free when withdrawn, provided There's no one correct answer for everyone. But the more you know about the two IRAS, the more confident you'll be when choosing one. First of all, the IRAS share some similarities. You can fund either one with many types of investments when you're young, you may have particularly - stocks, bonds, mutual funds and so on. And the contribution limit is also the same - you can put in up to $6,000 a year. (Those older than 50 can put in an additional $1,000.) If you earn over a certain amount, though, your ability to contribute to a Roth IRA is reduced. In 2021, you can put in the full S6,000 if your modified adjusted gross income (MAGI) is less than S125,000 and you're single, or $198,000 if you're married and file jointly. The amount you can contribute gradually declines, and is eventually limited, at higher income levels. penalty on withdrawals from the money you con- tributed (not your earnings), and you've already paid the taxes, so you could use the money for any purpose, such as making a down payment on a you've had your account at least five years and you don't take withdrawals until you're at least 59½. So, which IRA should you choose? You'll have to weigh the respective benefits of both types. But needs before you retire, since IRAS are designed to provide retirement income. If your income level permits you to select a Roth or traditional IRA, you may want to consult with your tax advisor for help in making your choice. But in any case, try to max out on your IRA con- compelling reasons to choose a Roth IRA. Given that tributions each year. You could spend two or three you're at an early point in your career, you may be in a lower tax bracket now than you will be during retirement, making the tax-deduction of traditional IRA contributions less beneficial. So, it may make sense to contribute to a Roth IRA now and take tax- free withdrawals when you're retired. Also, a Roth IRA offers more flexibility. With a traditional IRA, you could face an early withdrawal Financial Advisor. penalty, in addition to taxes, if you take money out before you're 59½. But with a Roth, you'll face no decades in retirement and your IRA can be a valu- able resource to help you enjoy those years This article was written by Edward Jones for use by your local Edward Jones Edward Jones, Member SIPC Edward Jones Sean P. Asiala AAMS Edward Jones Michael C. Caley AAMS Pam Covington CFP" AAMS Edward Jones Edward Jones Tod Heisler AAMS Edward Jones Jason Korner CFP Edward Jones Quinn Nofziger Edward Jones Gwen Ruppert Edward Jones Karen Rupert Financial Advisor 7329 West Jetferson Blvd Fort Wayne. IN 46804 Financial Advisor 414 S. Scom Rd. Fort Wayne. IN 4E814 Financial Advisor Financial Advisor Financial Advisor Financial Advisor 7030 Ponne inverness Way. Sute 125 Fort Wayne, IN 46804 432-3613 Making Sense of Investing Financial Advisor 14413 linois Rd Ste Fort Wayne, IN 46814 Financial Advisor 7127 Homestead Rd, Suite C Fort Wayne, IN 46814 karenruperteedwerdjones.com 263-4760 Making Sense of Investing 901 Chestrut Hils Parkway Fort Wayne, IN 46814 7525 West Jetferson Bivd. Fort Wayne, IN 46804 6525 Corstitution Dr. Fort Wayne. IN 40804 625-5700 Making Sense of wvesting 432-0304 Making Sense of investing 478-8038 Making Sense of Investing 444-3134 Making Sense of Investing 399-5853 Making Sense of Investing 625-3524 Making Sense of Investing