- Start at any age
The magic of compound interest is that the earlier you start, the more you’ll have when it’s time to retire. Unlike many accounts, you can open a Roth IRA as soon as you have earned income! You can start saving that babysitting or lawn mowing money the minute it comes in, no waiting for your employer to offer a retirement account.
- Pass it on
Roth IRA’s can be assigned benificiaries; people who will inherit the account’s value when you die. The disbursement for this can be tax free in many cases as well, avoiding the often high inheritance tax. Roth IRA’s also don’t have forced withdrawls at any age, so you can let the account continue to build even if you life to be 100 or older!
- Protection from creditors
Most states protect IRA assets from creditors and the funds cannot be touched even in instances of bankruptcy.
- Tax free disbursements
Because you’re depositing after-tax money into a Roth IRA, the money doesn’t get taxed when it’s withdrawn. This applies both to the money you deposit as well as the interest, dividends, or gains that you accrue.
- Emergency access
Roth IRA’s allow you to take out money at any time for any reason, up to the amount you’ve deposited. You can also take out interest, gains, and dividends in certain situations. These include first time home purchases, out-of-pocket medical expenses for unemployed persons, and higher education expenses.
- 401k Rollovers
If your employer offers you a 401k during your tenure, you’ll no longer to be able to contribute to it once you leave that job. You can however, roll those 401k savings into your personal IRA without any contribution limits. From there, that money can continue to grow with the tax perks of your IRA.
- Choose your own investments
IRA’s allow a very broad range of investments. You can buy stocks, bonds, silver & gold, even household debt through services like Lending Club or Prosper.