Life is all about planning.
Mundane it may seem but evolution comes from compartmentalizing the things.
Man has evolved from the wild because he learnt to classify, derive and plan.
If you need to grow you therefore definitely need to classify or categorizes your life.
If you were to plan your finance, you would plan ¾ of your life.
Financial literacy is fast gaining momentum.
Start early and catch the bus.
There are multiple retirement plans available in the market for retirement.
Roth IRA comes as the smartest retirement plan.
It is a win- win situation all the way.
I wouldn't be joking if I said if you invested in Roth IRA you would be having your cake and eating it too.
Here are some of the factors of why Roth IRA over other investment plans.
1)Flexibility: As compared to other investment plans you get the flexibility of investing in any sector bonds, mutual funds, stocks or real estate.
Depending on your risk taking capacity.
If you are really financially literate there is a chance you would make more money after your retirement by careful and consistent investment.
You can make shifts in your investment options from year to year.
This is flexibility at its best, not offered by the traditional investment plans.
2)Tax saving: If you were not to invest in any retirement plan you would be paying tax for that amount.
An amount of say $5000, in the IRA would help you save tax for that amount.
Do you pay tax on retirement withdrawal? There is good news, no you don't.
The entire drawing is tax free.
The tax money, whole your life you could use for some self pampering while planning for your old age.
This is what we call having your cake and eating it too.
3)Premature withdrawal of part amount: Traditional retirement plans like 401 (k) would want you to return the amount in a short duration and that too with a penalty.
Ouch it hurts! Not Roth IRA.
You can withdraw some amount after 5 years of your starting the account.
But letting the amount being invested is always better.
4)You can withdraw some amount for buying your house may be ¼ of the amount.
Your money always comes handy especially for every American's dream of owning house.
This facility is unavailable in traditional retirement plan.
5)You could withdraw money for junior's education.
Again unavailable in traditional plan of 401(k).
6)You can invest in Roth IRA only if you are earning or salaried.
The prerequisite of the investment is a calculator.
So you cannot invest from your pocket money as a student.
You can begin with an amount as little as $50 and go up to $5000.
Maximum slab up to which you can invest is decided by various factors such as your age, tax rebate etc.
You can download the calculator of your maximum investment option from the net.
You can save maximum in the older age group so that you get a better pay off in a short duration after retirement.
Invest in Roth IRA and live a richer, satisfied life.