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Using the various forms of the Roth IRA for retirement planning can be a powerful way to build wealth and achieve financial security in retirement.  But like any investment/planning decision, it takes consideration of several factors such as:

  • Your personal circumstances
  • Your outlook on the future – economically and politically
  • Financial goals
  • Resources available to you

There are many ways to fund Roth IRAs

  • Conversions from traditional IRA accounts
  • Rollovers from employer sponsored plans
  • Self-employment plans
  • And of course… Direct Contributions

The following article by Amanda Lott, CFP, MST, CRC states that contributions can be a good idea for:

  • Young individuals
  • Individuals who expect their future tax brackets to be higher than now
  • Individuals who already have ample retirement funds

Read the article Roth IRA Planning for more details and to gain additional insight into the benefits and risks of Roth IRAs.  You have until April 18, 2016 to make contributions for the year 2015.

While beyond the scope of this article, Roth IRAs can also be used to invest in alternative assets in what is commonly referred to as Self-Directed IRAs.   This vehicle is popular with real estate investors for the benefits it can provide.  However, you must be careful to adhere to the rules and know the limitations.  The use of a third party trustee is essential for investing in this way.  If you would like to know more, please do not hesitate to contact us!

Peterson CPA Group