Traditional and Roth IRAs
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Brian Gibbs has spent the last 12 years leading Heritage Retirement Advisors, Inc., in San Diego, California, as president and chief executive officer. In this position, Brian Gibbs assists San Diego-area clients in areas of retirement transition, retirement income, senior retirement planning, and more.
Choosing between a Roth IRA and a traditional IRA is one of the earliest decisions an individual or family must make when it comes to retirement planning. Although these decisions should be made under the aegis of a trusted advisor specializing in matters of retirement planning, individuals should familiarize themselves with a few basic aspects of each plan.
Generally speaking, individuals who qualify for both a Roth IRA and traditional IRA are better suited to traditional IRAs, assuming they will fall into a lower tax bracket upon retirement. Traditional IRA deposits are not taxed until withdrawal, which can equate to significant savings for those who move into a lower bracket later in life. On the other hand, individuals or families who expect to move into a higher tax bracket after retirement are likely to be more inclined to pay cheaper taxes up front, an opportunity afforded by Roth IRAs.
Roth IRAs additionally provide users with more access to their cash. Unlike most comparable retirement funds, Roth IRAs allow for early withdrawals without penalties. In many cases, diversification is the way to go, with individuals investing in plans that are both subject to up-front and delayed taxation. However, it bears repeating that all retirement planning decisions should be made with the assistance of a respected and experienced retirement planner.
Brian Gibbs (San Diego) 