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Saving for retirementis challenging for many Americans.
As reported byTheStreet, acclaimed financial guru Tony Robbins is a proponent of Roth IRAs.
Heres why the entrepreneur advised opting for a Roth IRA when possible and some additionalbenefits of this retirement account.
To Maximize Tax Savings
Taxes are an inevitable part of the lives of most Americans.
The government also wants to have a role in our retirement savings.
Robbins was pessimistic about the role taxes will play in the future for most Americans.
Roth contributions dont enjoy tax benefits today, but qualified distributions are tax-free.
Alternatively,traditional IRA distributionsare taxable.
Thats not to say Americans should avoid traditional 401(k) contributions.
To Manage Future Healthcare Costs
Healthcare costs are an inescapable expense for most Americans during retirement.
To Have More Flexibility
Roth IRAs also arguably provide more flexibility than a traditional IRA.
Traditional IRAs have required minimum distributions (RMDs) once Americans turn 73.
Those distributions are taxable.
Roth IRAs dont have this feature.
Plus, as Robbins noted on hiswebsite, Roth IRAs are more flexible when it comes to early withdrawals.
However, there are income limits to contribute to a Roth IRA.
That limit increases to $236,000 for married couples filing jointly.
Planning for retirement is essential for Americans wanting to enjoy their golden years.
A Roth lets savings grow tax-free, allowing people to better manage taxes upon retirement.
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