Question

why is a Roth IRA better than a regular traditional IRA?


why is a Roth IRA better than a regular traditional IRA?
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Roth IRA is better than traditional IRA because of following reasons-

A. Early withdrawable rules are highly flexible in case of Roth whereas it is not that flexible in case of traditional as it will be implementing higher penalties.

B. Funding of Roth IRA in conjunction with 401(K) will be providing various individuals with tax advantages and tax benefits which will be significantly lower in their taxable expenses and it will also provide them with tax diversification facilities.

C. Tax break does not arrive until retirement so there is a lower willingness to spend the money and hence it will be leading to a higher savings of Corpus

D. Roth IRA has fewer restrictions for retirees than the traditional IRA.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 11 Even if you have opened and contributed to a traditional or Roth IRA in...
Question 11 Even if you have opened and contributed to a traditional or Roth IRA in the past, you can convert it (under specified conditions) into the other type of IRA. Which of these types of conversions is by far the more common: From traditional to Roth From Roth to traditional Question 12 If you expect not to spend the contents of your IRA during your lifetime and would like to leave the money to your children, you should contribute...
Chapter 4: Why is asset allocation important? Traditional or Roth IRA? Why or why not? With...
Chapter 4: Why is asset allocation important? Traditional or Roth IRA? Why or why not? With the indexes and passive management outperforming active management, argue for and against active management. Chapter 5: Identify the sources of risk. Explain beta and why is it important. What makes a portfolio efficient?
Jim, who is age 39, converts a $74,500 traditional IRA to a Roth IRA in 2015....
Jim, who is age 39, converts a $74,500 traditional IRA to a Roth IRA in 2015. He also contributes $5,500 to a Roth IRA in 2015 for the tax year 2015. If Jim takes a $4,000 distribution from his Roth IRA in 2016 when the account is worth $100,000, how much of distribution is subject to income tax and how much of distribution is subject to 10% penalty?
When investing in your 401K, which IRA plan would you choose (Roth IRA or Traditional IRA)?...
When investing in your 401K, which IRA plan would you choose (Roth IRA or Traditional IRA)? give an explanation as to how they differ and which you would choose for your retirement.
The Taxpayer Relief Act of Country A created the Roth IRA (A Roth IRA is an...
The Taxpayer Relief Act of Country A created the Roth IRA (A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Established in 1997, it was named after William Roth, a former Delaware Senator), which permits qualifying individuals to make after-tax retirement contributions of up to $2,000 annually. Contributions to a Roth IRA are not tax-deductible, but no taxes are paid on earnings generated from a Roth IRA....
Both nondeductible contributions to a traditional IRA and contributions to a Roth IRA are similar in...
Both nondeductible contributions to a traditional IRA and contributions to a Roth IRA are similar in the sense that neither provides a tax deduction at the date of contribution. Which of the two types would be most advantageous to taxpayers and why? Your client is about to establish his own business and hires at least 10 employees. They ask you for advice concerning establishing a qualified versus a non-qualified retirement plan. What do you advise your client? Would your answer...
In 2016, Dylan converted $5,250 from his traditional IRA to a Roth IRA. In 2019, when...
In 2016, Dylan converted $5,250 from his traditional IRA to a Roth IRA. In 2019, when the value of the Roth IRA had grown to $5,600, Dylan, then age 60, withdrew the entire balance. What is the tax treatment of this distribution? None of the distribution is included in income, but there is a 10% tax penalty on the entire distribution. Only the $350 in earnings is included in income, but there is no penalty on the earnings distribution. Only...
n 2016, Dylan converted $5,250 from his traditional IRA to a Roth IRA. In 2019, when...
n 2016, Dylan converted $5,250 from his traditional IRA to a Roth IRA. In 2019, when the value of the Roth IRA had grown to $5,600, Dylan, then age 60, withdrew the entire balance. What is the tax treatment of this distribution? None of the distribution is included in income, but there is a 10% tax penalty on the entire distribution. Only the $350 in earnings is included in income, but there is no penalty on the earnings distribution. Only...
One of the simplest tax avoidance strategies is to contribute to a Roth IRA, although this...
One of the simplest tax avoidance strategies is to contribute to a Roth IRA, although this may not be right for everyone. Some individuals, particularly low-income households that may be eligible for tax credits because of young children in the home, may benefit more from contributions to a traditional IRA. Here, you want to help Susan identify the best retirement savings option for her situation. Susan is 25, single, and makes $42,000 a year. Susan does not have access to...
A back door Roth IRA is ... Group of answer choices A. no longer an option...
A back door Roth IRA is ... Group of answer choices A. no longer an option in 2020 as the loophole that allowed it has been changed. B. a way fro someone to do a Roth conversion if their income exceeds the limits for Roth IRA conversions. C. a way to take advantage of a loop hole in the rules such that someone can make a contribution to a ROTH IRA and still take a deduction for the contribution, D....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT