Roth Individual Retirement Accounts or Roth IRAs are often pitted against traditional IRAs in ascertaining which the better investment option for one’s retirement is. Unlike traditional IRAs, a Roth account is where an individual pays taxes on the contributions and enjoys tax-free withdrawals later. There are arguments in favour of both types of retirement funds though you will find, Roth IRAs typically win more supporters. And there several reasons for the same; read on to find out more!
1. You Pay Your Tax Bill In Advance
When making contributions to a Roth IRA, you’re contributing funds that have already been taxed. This has immense value for people who are slotted in low tax brackets. In the circumstance that they increase earnings and transition to a higher tax bracket, or even when the tax is raised, since your taxes on contributions have already been paid, you won’t have to pay higher taxes later with increase.