Roth IRA
The Calculations of Roth IRA in the year of 2008
Roth IRA is an individual retirement account and it is a unique retirement plan to make future financial planning under the U.S law which is not taxed pertaining to certain terms and conditions.
There are few calculations through which an individual can get an idea related to the Roth IRA.
In the year 2008, the maximum contribution of $5000, was equal to approximately $416 a month or $100 a week. If an individual does the math this way, the calculation seems a fairly easy amount to contribute by the employees who are paid on a daily basis and have just begun their careers.
Take an assumption, that an individual opens the Roth IRA at the age of 21 and till the age of 65, if that individual keeps making the maximum contribution on the retirement account, then there will be a healthy amount invested in the account which would easily sum up to somewhere around a million dollars. So the future is free of stress. So, neither the account holder will exceed the income level nor would he need to make early withdrawals.
From the above example, it is evident that the individual will have to make the contribution of $5000 per year for 28 years or else when an individual reaches the age of 49 years. For the next 15 years, they would contribute $5000 per year until the age of 65. This would generate total $230,000 which is tax-free.
This sounds like a wonderful investment deal; however, certain experts these days do not prefer Roth IRA since they believe that it ends up putting the account holder in the high income tax bracket upon retirement. Therefore, it is strongly recommended to consult a financial expert who understands one’s customized needs better.
There are few calculations through which an individual can get an idea related to the Roth IRA.
In the year 2008, the maximum contribution of $5000, was equal to approximately $416 a month or $100 a week. If an individual does the math this way, the calculation seems a fairly easy amount to contribute by the employees who are paid on a daily basis and have just begun their careers.
Take an assumption, that an individual opens the Roth IRA at the age of 21 and till the age of 65, if that individual keeps making the maximum contribution on the retirement account, then there will be a healthy amount invested in the account which would easily sum up to somewhere around a million dollars. So the future is free of stress. So, neither the account holder will exceed the income level nor would he need to make early withdrawals.
From the above example, it is evident that the individual will have to make the contribution of $5000 per year for 28 years or else when an individual reaches the age of 49 years. For the next 15 years, they would contribute $5000 per year until the age of 65. This would generate total $230,000 which is tax-free.
This sounds like a wonderful investment deal; however, certain experts these days do not prefer Roth IRA since they believe that it ends up putting the account holder in the high income tax bracket upon retirement. Therefore, it is strongly recommended to consult a financial expert who understands one’s customized needs better.
