Which retirement plan is right for you?
Only 27% of LGBTQ people report participating in an employer-sponsored retirement plan. If we want a fantastic life well into our golden years, we need to invest in a retirement account – and two of our options are the traditional IRA and the Roth IRA.
Hear the deciding factors for choosing traditional or Roth IRAs
Are traditional or Roth IRAs more beneficial for you?
In this episode of Queer Money®We’ll discuss the pros and cons of the traditional versus Roth IRA and help you decide which type of retirement account is best for you. We explain the need for the LGBTQ community to save for the future and share the encouraging results of our retirement planning survey in the Queer Money® Facebook group.
We’ll walk you through the pros and cons of the traditional IRA, including the immediate tax benefit and early withdrawal penalty. And we describe how the Roth differs from its income limits to contributions to its tax benefits in retirement. Listen in to learn which retirement account is best for you and learn more about the benefits of saving for retirement through an IRA.
Traditional and Roth IRA topics covered
The Basics of an Individual Retirement Account (IRA)
Retirement savings account for one person only
Help save for retirement instead of retirement
All have a tax advantage (money invested in growth)
Why the LGBTQ community needs to learn about IRAs
According to the Prudential survey, only 27% participation
It is more likely that you will incur higher expenses in retirement
The results of our retirement account Facebook group survey
39 have 401(k)s
29 have Roth IRAs
21 have traditional IRAs
11 have 403(b)s
11 have HSAs
The Advantages of the Traditional IRA
Contributions tax-deductible or tax-deferred
No annual income limit for contributions
The Disadvantages of the Traditional IRA
Annual withdrawals must begin at age 70½
Pay taxes on withdrawals in retirement
Early withdrawals are subject to tax + 10% penalty
The Advantages of the Roth IRA
No withdrawals are required for the original owner
No tax on qualified withdrawals in retirement
Contributions can be withdrawn at any time without penalty
The Disadvantages of the Roth IRA
Contributions are not tax deductible
Income limits for contributions
Here’s how to decide between the traditional and Roth IRA
- Higher income before retirement = traditional
- Higher income in retirement = Roth
- Contact a tax advisor or accountant
Resources on IRAs
