Should I Set Up a Roth IRA for Myself

Are you looking for a retirement savings vehicle that allows you to contribute after-tax income, with the benefit of tax-free growth and tax-free withdrawals during retirement? A Roth IRA may be what you are looking for! Unlike a traditional IRA contribution, a Roth IRA contribution is not tax-deductible. Here are the Key Tax Advantages of a Roth IRA:

1. Tax-Free Growth: Because Roth contributions are made with after-tax dollars, your investment within a Roth IRA grows tax-free! This means that any capital gains, dividends, or interest earned within your account are not subject to taxes, allowing the account to compound over time without tax erosion.

2. Tax-Free Withdrawals: Qualified distributions from a Roth IRA are tax-free. To be considered qualified, your account must have been open for at least five years, and you must be at least 59½ years old. This feature provides tax-free income during retirement, which can be a significant advantage, especially if you anticipate being in a higher tax bracket during your retirement. Get the clock started, open an account today!

3. No Required Minimum Distributions (RMDs) + Flexibility with Contributions and Withdrawals: Unlike traditional IRAs, Roth IRAs do not require you to take distributions at a certain age. This allows your funds to continue growing tax-free for as long as you choose. This can provide you with greater flexibility in retirement planning and the potential to leave a tax-free inheritance to your heirs. Your contributions to a Roth IRA can be withdrawn at any time without taxes or penalties, since they were made with after-tax dollars. With this being said, withdrawing earnings before meeting the qualified distribution criteria may result in taxes and penalties. This flexibility can be beneficial for individuals who may need access to their contributions before retirement.

The 2025 Contribution Limits and Income Eligibility: In 2025, the contribution limits for Roth IRAs are as follows:

• Individuals Under Age 50: Up to $7,000.
• Individuals Aged 50 and Over: Up to $8,000, which includes a $1,000 catch-up contribution.

Please note that these income limits are subject to annual adjustments for inflation. If your income exceeds the eligibility thresholds, you might consider a "backdoor" Roth IRA conversion, which involves contributing to a traditional IRA and then converting those funds to a Roth IRA. There is also the Mega backdoor Roth, through an employer sponsored plan. These strategies have specific tax implications, such as the pro-rata rule and should be approached with guidance from a financial professional. Contribution limits and the tax laws are subject to change, so it is essential to stay informed about the latest regulations.

In conclusion, a Roth IRA can offer you several tax advantages, including tax-free growth, tax-free withdrawals, no required minimum distributions, and flexibility in contributions and withdrawals. As always, consulting with a financial advisor can provide personalized guidance tailored to your financial situation.

DISCLAIMER:

Because investor situations and objectives vary this information is not intended to indicate suitability or a recommendation for any individual investor. This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Product guarantees are based on the claims-paying ability of the issuing company and assume compliance with the product’s benefit rules, as applicable. There are retirement account risks that could diminish investor returns, such as, but not limited to: low interest rates, market volatility, withdrawal timing and sequence of returns risk, government policy uncertainty and increased longevity. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment. Advisory services offered through Asset Strategy Advisors, LLC (ASA), an SEC registered investment adviser. Insurance services offered through Asset Strategy Financial Group, Inc. (ASFG). CIS, ASA and ASFG are separate companies.

Products and services made available through Asset Strategy and Concorde Investment are not insured by the FDIC or any other agency in the United States and are not deposits or obligations of, nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.