Presentation on theme: "Retirement Basics Roth IRA Traditional IRA 401K. Roth IRA After tax contributions Best if you expect to be in a higher tax bracket during retirement than."— Presentation transcript:
Roth IRA After tax contributions Best if you expect to be in a higher tax bracket during retirement than now. Can hold a large range of investments (Stocks,Bonds, Mutual Funds, Real Estate, etc.) $4000 maximum per year (2007) if income is under $101,000. Your 2008 contribution can be up to $5000.
Traditional IRA Before tax dollars (tax deferred) Taxed when withdrawn Best used if expecting a lower tax bracket in retirement Large range of investment options (Stocks, Bonds, Mutual Funds, Real Estate, etc.) $4000 maximum per year if income is under $50,000.
Other Considerations Dividend treatment Tax bracket consideration Traditional to Roth rollover Congress can change the rules for Roth or Traditional IRAs anytime
401K Plans Matching contributions Can be rolled into an IRA when switching employers Sometimes limited investment options Maximum contribution depends on income and company structure
Get Started NOW! Most brokers offer IRAs with small or no minimum investments. Invest as much as you can in your employers 401K plan. Try for at least all of the match.