Roth IRA
How Roth IRA helps teenagers to get an independent future?
During the current economic conditions, future seems uncertain especially when one thinks of their kids. However, a teenager who remains dependent on his parents too can now grow up to be a young adult whose retirement earnings and first home purchase will be taken care of.
Roth IRA has become a blessing for students and young adults. The withdrawals are tax-free and hence it attracts people the most. As per the present rules and regulations, the earnings can be withdrawn from the Roth IRA without paying any taxes if one waits till the age of 59 and ½.
Here is a typical example wherein it can be concluded that the Roth IRA is the best alternative. For instance, a teenager invests $3000 per year for the coming 50 years then on an average it becomes 8% a year.
Therefore, this 8% equates to $1.7 million plus additional which can be withdrawn without any taxes. This is merely a teaser; the entire list of advantages is much more pleasant. In future, it can be more beneficial.
The earnings which are contributed in the retirement account can be withdrawn easily and the account holder would even not be subjected to pay the taxes or the penalties.
Over and above to these advantages, if the teenager wants to use the money from the made contributions in order to pay the college fees then there will be no taxes or the penalties charged on the same subject to certain terms and conditions.
As per the Internal Revenue Service (IRS), the income tax has to be paid on the money of the college expenses and the taxes are less for the college students. For first home purchase as well the rules are quite relaxed up to $10,000 withdrawal.
Roth IRA has become a blessing for students and young adults. The withdrawals are tax-free and hence it attracts people the most. As per the present rules and regulations, the earnings can be withdrawn from the Roth IRA without paying any taxes if one waits till the age of 59 and ½.
Here is a typical example wherein it can be concluded that the Roth IRA is the best alternative. For instance, a teenager invests $3000 per year for the coming 50 years then on an average it becomes 8% a year.
Therefore, this 8% equates to $1.7 million plus additional which can be withdrawn without any taxes. This is merely a teaser; the entire list of advantages is much more pleasant. In future, it can be more beneficial.
The earnings which are contributed in the retirement account can be withdrawn easily and the account holder would even not be subjected to pay the taxes or the penalties.
Over and above to these advantages, if the teenager wants to use the money from the made contributions in order to pay the college fees then there will be no taxes or the penalties charged on the same subject to certain terms and conditions.
As per the Internal Revenue Service (IRS), the income tax has to be paid on the money of the college expenses and the taxes are less for the college students. For first home purchase as well the rules are quite relaxed up to $10,000 withdrawal.
