IRA questions?

[BILLVO]

I changed employers and have a 401K to rollover into an IRA.



My question is what are the pros/cons of a traditional and the Roth IRA.



I am in my late 30's and want to know which would be the best bet to roll over into. From what I read I will have to pay taxes on the amount rolled into a roth IRA at rollover time.



I am of the thinking that it may be better to pay taxes now at the current tax rate than the futures most likely higher tax rates as the gov is aiming for.



What are your thought/ comments

 

[scootergmc]

Do you listen to Clark Howard on the radio or internet? He does consumer advice, investments, etc. He absolutely loves the Roth IRA... I have a pretty good retirement package, so I'm not too concerned with it right now, but should I leave my current job, it's something I'll do. I could just do it anyway for that matter, dunno why I don't.

Anyway, he talks about all sorts of things... here's his investment page if you want to check it out:

http://clarkhoward.com/
http://clarkhoward.com/liveweb/shownotes/category/7/76/356/

 

[Buffalo]

The nice thing about the Roth IRA is that the interest & principal is non-taxable when you start to withdraw. That has a lot of value, in my opinion. I looked into it but, I did not have enough years left for working & contributing to make it worthwhile (as told to me by my CPA). You are still young enough that it might work, for you. Probably will.



Another thing you can do is roll the money over into a self-directed Roth IRA & invest in rental properties. By the time you retire, you should have a number of properties PAID FOR. And NO TAXES on the growth in value. I think the rent is non-taxable, also, however, I would check with a tax professional, on that. Homes are cheap, now. At least they are in my area, & others. Great time to buy!!!



This might be a great time to contact a tax professional & advisor. This way, you will be less likely to make a mistake. Consider the cost to be an investment in your future. Decisions you make, now, can have a considerable effect on how you live your future (retirement). When I was a young man, I wish I knew what I know, today. I'm not broke, by any means but, who knows how much I'd have today if I had started earlier.



Good Luck & congratulations on looking into this stuff at an early age.



Joe F.