Why A Roth IRA Should Be Part Of Your Retirement Income Plan

Photo by Mathieu Turle on Unsplash

Roth IRAs were created 20 years ago to give investors a way to invest for retirement that allowed for tax-free distributions after age 59 ½.

But they came with a catch.

These new IRAs were to be funded with after-tax contributions. Unlike traditional, tax-deductible IRAs and workplace retirement plans like 401(k) accounts, contributions to Roth IRAs are not tax deductible.

Since then, investors have debated whether it’s best to fund a Roth IRA or a traditional, tax-deductible IRA. Strong arguments can be made for both, but most financial professionals agree: whenever possible, the Roth IRA should be part of your retirement income plan.

Here’s why:

70-Year Old IRA Owners: Avoid This Expensive Mistake

Photo credit: Simon Wijers. Unsplash.

In 2017 the first baby-boomers turned 70. Happy birthday! However, if you had your 70th birthday between January 1 and June 30 of this year, the IRS says you must take your first IRA “required minimum distribution” (aka RMD) this year as well.

Well, OK. Technically, you really have until next year. More about that below.

2018 Social Security Raise – Better Than a Stick in the Eye

photo credit: Vitaly. Unsplash.com.

The Social Security Administration projects a 2.2% increase for those receiving retirement benefits in 2018. While this is actually the biggest increase in years – 2017 saw an increase of only 0.3% and 2016 social security recipients saw no increase at all – it’s not likely to bump you into a new tax bracket.

In dollars, the projected increase adds up to about $28 per month for the average social security recipient.

As my grandfather, himself a longtime social security beneficiary, is fond of saying, “it’s better than a stick in the eye”.

Highlights From Ed Slott’s Spring 2017 Elite IRA Advisor Conference

Mike Branch is a member of Ed Slott's Master Elite IRA Advisor GroupI have been a member of the Ed Slott Elite IRA Group for nearly a decade. One of the benefits of membership is that twice a year I get to geek out on the latest rules and regulations regarding IRAs and retirement plans with over 400 financial advisors from around the country.

This is also one of the best opportunities in the industry to meet with other like-minded advisors to learn how to help our clients make the most of their retirement assets, and take a deep dive into the estate and financial planning strategies that benefit them most.

This spring’s conference in Kansas City, Missouri, did not disappoint. In the future I may do a more detailed blog post on one or more of the topics below. In the meantime, follow along as I share some of the highlights of the spring conference.