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From skipping key setup steps to makingcostly investmentmistakes, even well-meaning investors can sabotage their growth.
Here are critical steps for Roth IRA investorsthat they often miss.
Not Checking Income Limits
Many investors open a Roth IRA without checking the income limits.
Be sure to check with the income limits before opening the account.
Without selecting specific investments, contributions sit in cash while investors miss out on compound growth.
One client didnt even discover for two years that her Roth contributions werent invested.
She missed out on inertia for two bull market years.
Short-Term Tax Thinking
One often-overlooked factor in Roth IRA planning is ones futuretax bracket.
The heirs pick up asignificant income tax burdenwhen inheriting an IRA.
The Roth IRA is not taxed to your heirs and can grow income tax-free after your death.
For example, market shifts can cause ones asset mix to drift and potentially undermine their original investment strategy.
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