Ed Slott: The Case for Roth IRA Contributions

Morningstar, Inc.

Key Takeaways

• Since you pay taxes upfront, Roths can give you a more accurate value of your retirement savings.
• Because Roths don’t have required minimum distributions, the money in the account can grow tax-free for the rest of the accountholder’s life.
• Unlike tax-deferred accounts, Roth accounts take advantage of known tax rates.
• The government benefits from the taxes that it receives upfront from Roth contributions.
• If you hit the income limits for opening a Roth, you can contribute to a nondeductible IRA and convert it to a Roth.

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