Advantages to Starting a ROTH When You’re Young

starting a ROTH from your piggy bank

Time is on You Side if You Are Still Young

ROTH plans differ from standard Individual
Retirement Accounts in a number of ways. This is often a good thing, and for those who are young, the advantages are even better. In fact, the sooner you do start an account the better. This will especially become important at the time of retirement.

Use the Rules to Your Advantage

There are a couple of rules that can be used to your advantage, especially if you have started your account at a younger age.

  • Avoid Taxes: With a ROTH, any interest and capital gains in your account will grow on a tax-deferred basis. While you won’t get a tax break at the end of the year for your contributions, as you would get with standard retirement accounts, you will get all that accumulated money tax free when you reach 59 ½ years of age. So, the younger you start, the more you can contribute and the more time your investments have to grow and eventually be taken out tax free.
  • Take Without Penalty: Another ROTH rule that you can use to your advantage is being able to take out up to what you have contributed without incurring a penalty. This is unlike standard plans which hit you with a penalty for any withdrawal before the age of 59 ½. With a ROTH, you might have a current account value of $12,000, but only contributed $10,000 over the life of the account. So, you can take up to that $10,000 out without fear of penalty. If you start your ROTH when you are young, then that can mean a lot more money in reserves should you ever need it at the age of retirement, especially when the power of compounding is own your side.

Making a Good Thing Even Better

The only thing that could make a ROTH better would be if you could have total control over the investment that you make and not be limited in any way. Well, in actuality, you can.

For this, you will have to learn about a ROTH LLC setup. Once your ROTH LLC setup has been completed, you will gain an investment flexibility that is far beyond a standard or regular ROTHs. With a ROTH LLC, you will be able to invest in things such as realty , gold, tax liens, partnerships, and more. This makes a ROTH, which is a good thing already, even better.

To find out how a ROTH LLC setup can be to your retirement advantage, please call 877-339-4559.

This entry was posted in Financial Planning. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *