Leave taxes in your dust. With a Roth IRA, you invest money that’s already been taxed. Since you already paid the taxes on your Roth IRA contributions, you don’t owe taxes on the withdrawals later.
If you’re at least 59½, and you hold on to your Roth IRA for at least five years, all withdrawals are free of federal income tax. Withdrawals made prior to age 59½ (outside of a few exceptions) may be subject to a 10% tax penalty.
Also know that neither Nationwide nor its representatives provide tax or legal advice. You should consult with an attorney or other professional advisor for such advice.
Roth or traditional − what’s the difference?
The biggest difference between Roth and traditional IRAs is how each one deals with taxes. Unlike traditional IRAs, Roth IRAs do not provide immediate tax deductions. Instead, you pay taxes on any contributions you make up front. Roth IRAs, like traditional IRAs, do benefit from the opportunity for tax-deferred growth and compounding interest.
If you don’t mind investing the money you’ve paid income taxes on now for the security of tax-free income later, a Roth IRA may be the best IRA for you.
Let’s get started!
Want to get a Roth IRA but don’t know where to begin? These tips will help you set up a Roth IRA − with the help of your investment professional, of course.
Your investment professional will need to have a good understanding of your personal financial situation. On your first meeting, be prepared to bring:
- Information and statements from your employer-sponsored retirement plan
- Information and statements from other investments, including any other IRAs
- Checking and savings account information
Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value