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Why You Need A Roth Right Now || Why a Roth IRA Can be Better Than a Traditional IRA || Joe Wirbick - YouTube
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hello everybody joe orbit coming at you
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today we are going to talk about roth
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iras what is a roth ira why may you want
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to invest in it why it may not fit your
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future and how is it going to affect
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your income when you actually retire so
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roth iras were started by senator roth
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back in the late 90s and the idea behind
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the roth was that this was an account
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that would allow you to have money grow
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tax free i want that to sink in for a
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moment because there's hardly any
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options we have as us citizens to
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achieve something on a tax-free basis
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and the roth is your answer to that so
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how does it work if you want to put
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money away for the future if you stick
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the money into the roth this year you
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have to pay taxes on the money you're
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sticking into the roth so why would you
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do that you would do that if you feel
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there's any chance that taxes may go up
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in the future because you're paying your
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tax now and if taxes go up in the future
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you won't participate in that tax
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increase and unlike an ira where you
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become a partner with the us treasury
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department and they own a portion of
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your account with a roth ira the entire
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account is yours you own 100
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of the account so you put the money into
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it you pay the tax now each and every
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year that the account grows
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then this sounds a little weird but i'm
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going to be technical here each and
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every year the account actually grows
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tax deferred similar to an ira and why
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do they say tax deferred because you
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have to meet the requirements the
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guidelines for when you access the money
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from the roth in order for it to be
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tax-free
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make sure you follow those guidelines
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and the money becomes tax-free now when
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you go to take the money out as long as
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you've met those guidelines and those
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guidelines are you have had the roth ira
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established for at least five years
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that's the five-year rule and it's only
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one five-year period for anybody in the
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country so if you've put a dollar into a
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roth six years ago you've met those
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requirements then the other thing you
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have to think about is you have to be 59
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and a half in order to access the funds
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from that 100 tax free if you want to
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access all the money from the roth ira
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big difference from the roth ira to the
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ira there are no required minimum
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distributions no rmds on a roth ira and
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why is that well in the ira the irs is
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forcing the money out at 72 because
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they're tired of waiting and they want
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to get their tax dollars a roth is 100
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tax free so when you pull the money out
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the irs doesn't get paid at all so
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there's no reason for them to have
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required minimum distributions
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also
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when the roth comes out it doesn't
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affect your social security so if the
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only income you have is social security
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and roth you retire 100 tax-free it's
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incredible i know you probably didn't
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think it was possible it is possible
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with social security and with a roth so
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as i said if you believe there's any
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possibility that taxes may go up in the
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future that you may be in a higher tax
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bracket down the road you should be
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looking at roth iras now a traditional
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roth ira has income limitations so if
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you earn more than a certain amount of
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money and i'll have a link down below
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for the irs guidelines of those income
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limitations you cannot contribute to a
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traditional roth ira that's why they
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invented roth 401ks there's no income
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limitations on a raw 401k so if you're
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working for a company and they offer a
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401k get on the computer check to see do
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they offer a roth 401k and would you
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want to start making your contributions
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into the roth portion
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of that 401k and again you only do that
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if you feel there's any possibility
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taxes may go up in the future now as of
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the recording of this video we're in the
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lowest tax brackets we've seen in
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decades at this country and we're facing
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unprecedented debt levels 26 27 trillion
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dollars of debt so there is a slight
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possibility that taxes may go up in the
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future and if you feel that way as well
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you need to take a deep look into how
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you're saving your money because doesn't
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it make sense to pay the taxes now and
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never have to pay the taxes again
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no required distributions
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no taxes and when you pass
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that money passes on to your kids your
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beneficiaries 100
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tax free it's incredible how much more
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money you can pass on how much more
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income you can have when you're not
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paying taxes in 2019 there was a secure
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act put into place and the secure act
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said when you pass on an ira or a roth
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ira the beneficiaries can no longer
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stretch out that distribution phase that
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means they have to take the money out of
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the account within 10 years and let's be
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honest let's say you've done a great job
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you've put away hundreds of thousands of
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dollars into your ira or your roth ira
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when you pass and the beneficiaries are
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given the option do you want the money
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now or do you want to wait 10 years what
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do you think the average beneficiary is
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going to say the beautiful thing about
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the roth no matter what they do whether
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they take the money now or they wait the
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10 years it's 100 percent income tax
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free to your heirs so what i've found is
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you can increase your legacy to your
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heirs simply by having money sitting in
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roth iras roth 401ks i hope this video
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was helpful if you enjoyed this video
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make sure you hit the like button if you
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like what i have to say and you want to
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hear more make sure you hit the
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subscribe button and turn on the bell so
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you get notifications of future videos
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and i'll see you next time
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you
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