Are you contributing simply for the immediate sugar rush of a tax break?
Are you contributing because you want to make an investment in providing future income?
Of course, it very well could be both.
I warn you: do not simply contribute to a retirement plan today for a tax break. Take the time to understand what your options are.
For many, it might make sense to pay taxes on the seed today for the opportunity to let the dollars grow tax deferred and – within a Roth IRA you would receive tax free qualified withdrawals on the harvest.
Receiving a tax break today could substantially increate your total tax paid overtime.
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Qualified Roth IRA withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax.
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