IRA contribution
How do I know which IRA type Traditional vs. Roth to contribute??? Just met with my CPA and she said to contribute to Traditional that qualified up to $6500 Please reply
How do I know which IRA type Traditional vs. Roth to contribute??? Just met with my CPA and she said to contribute to Traditional that qualified up to $6500 Please reply
Permalink Submitted by Alan - IRA critic on Mon, 2014-04-07 15:47
CPAs often focus on maximizing current tax breaks. There are several factors to consider, but the prevalent factor is your current marginal tax rate vrs your estimate of what that rate will be in retirement. Unless you have significant future earnings potential, you should probably make traditional IRA contributions until you prove to yourself that you can save and accumulate assets for retirement. Since you are over 50, you probably already know that. After you reach some arbitrary figure such as 40k and the future looks good, you can diversify between Roth and deductible TIRA contributions. If your income is too high to deduct a traditional IRA contribution, it is always better to make Roth contributions if you qualify. If your income it too high for Roth contributions, you might consider making non deductible TIRA contributions and then converting them.
Permalink Submitted by Glinda Pritchett on Tue, 2014-04-08 09:59
Do qualify for a Roth. Now the question is where and who should I establish one. Financial planner vs my credit union/bank????