Updated: Aug 12, 2019
Retirement planning is important to your future. As of 2017, the average monthly Social Security payment was $1,360. Most likely, you will need more than that to live comfortably during your later years, as you will still have bills, medical needs, and may be paying rent or may still paying on a mortgage. Keep in mind that retirement can last 30 years or more these days, and the cost of living will only increase. A retirement plan allows you to provide for yourself and/or your spouse, so you can enjoy your golden years.
BUT WHAT'S THE DIFFERENCE?
To understand the difference, we must first look at how each retirement plan operates.
ROTH IRA: Contributions to a ROTH IRA are not tax-deductible, but eligible distributions
are tax free. What this means is, you contribute to a Roth IRA with after-tax dollars, but as the account grows, you will not face any taxes on capital gains. So when you decide to retire and collect, you can withdraw from the account without any taxes being taken out on your withdraw. A ROTH IRA may seem ideal, but keep