Roth Ira

[TN TITAN Fan In STL]

I Opened One This Week And I Have A Couple Of Questions,how Does This Thing Make Money? How Many Mallers Have Had Success With The Roth Ira? I Used A Roth Calculator And By The Time You Hit Your 50's And 60's This Thing Could Be Worth Some Serious Cash.

[domafia]

Roth makes money this way (I'll keep it simple):

1) Federal tax-free growth
2) After age 59.5, you can withdraw contributions anytime without penalty or tax

[E_Wrecked]

Also, withdrawls for first time home purchases are not taxed. It depends so much on your tax bracket when you reach 59.5. Do you anticipate you will be mkaing more at 59 or more now. Being as though the roth is tax free coming out, you pay the tax going in. And the traditional works the other way around

Really so much of it relys on your tax bracket

Its the best long term investment I can think of, hence the reason contributions are limited to certain amounts during the year. Maybe I will open one soon but I have 37 years before 59

[dhunter]

Originally Posted by E_Wrecked

Also, withdrawls for first time home purchases are not taxed. It depends so much on your tax bracket when you reach 59.5. Do you anticipate you will be mkaing more at 59 or more now. Being as though the roth is tax free coming out, you pay the tax going in. And the traditional works the other way around

Really so much of it relys on your tax bracket

Its the best long term investment I can think of, hence the reason contributions are limited to certain amounts during the year. Maybe I will open one soon but I have 37 years before 59

I hear this somewhere, please correct me if I'm wrong. But I think you can withdrawl any amount that you put in at any time without penalty because it's already been taxed. Any money that your funds make has to stay in. You can make a withdrawl from a regular 401k for a 1st time home purchase without penalty (it still gets taxed) There's a limit though, I think 20k.

[E_Wrecked]

forgive me I dont know the restricitons but you do have to pay the money back. They are making money by you allowing them to hold your dough for so long, they really dont want you taking the money out. Taking the money out early is a "penalty" based on a percentage, so it's a tax but not income tax.

Educational expenses and first time home purchases are the only thing you can withdrawl early without a penalty (I think). Even with that I think you are restricted to a certain portion of the balance you've invested.

The reason IRA pays so well is because they are basically GUARENTEED your money till 59.5. If I say holy chit 1.5 million when I'm 59.5, I think thats alot fo money.

I'm 24 so in 35 years 1.5 Million is not 1.5 million, inflation value of the dollar etc... is going to make the 1.5 million less attractive.

It's still the safest long term investment out there, and works of compounding interest.

The compounding interest is the biggest reason IRA's make money

They are getting the money from you rather cheap considering how much they can make off the money in 34 years and what they would pay me for my investment

[TN TITAN Fan In STL]

Thanks For All The Info Ewrecked