Troy, MI (PressExposure) May 20, 2009 -- Michael McGee, financial advisor and retirement planning expert, was recently interviewed. He explained the tax benefits of having an IRA, and the difference between the Traditional IRA and the Roth IRA.
âWhen you contribute to a traditional IRA, you do not pay Federal Income Taxes on that portion of your earnings. This means reducing your taxable income now, saving on Federal Income Taxes now, but, paying the taxes when you withdraw the funds. The downside is that you might be in a higher tax bracket by that time, therefore, paying more taxes than you would have in your current tax bracket.â
Michael explained another option for retirement planning by investing in a Roth IRA. âIf you deposit your money to a Roth IRA, you pay the income taxes due during the year the money was earned; therefore, you do not save on Federal income taxes now as with the Traditional IRA. The benefit is earned in the future, when you are ready to retire and use the money. Distributions are completely tax-free, even if youâre in a much higher tax bracket now. As a bonus, you will not be required to pay income taxes on the interest earned.â
Both IRA plans have their tax benefits as Michael explained. âThe decision to open a traditional or Roth IRA is based on whether you need the income tax reduction now or if you can wait for this savings. The beauty of an IRA is that while you save for your future, you save on income taxes as well.â
Michael McGee is a financial planner who specializes in helping people of all ages get on track to meeting their current and future financial goals. Retirement planning is not something to be put off until later; all working adults should be saving for retirement. For more information, visit http://financialplanningwaynecounty.blogspot.com/
Contact: Michael S. McGee, MBA Financial Advisor 888 West Big Beaver Suite 850 Troy, MI 48084 248-720-0300 Email: firstname.lastname@example.org
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