Mari talked with Kiplinger’s Personal Finance magazine about how to choose between a Roth or Traditional IRA.
The first thing to know is that the contribution limit of $6,000 is unchanged from 2019 (you can contribute an extra $1,000, for a total of $7,000, if you’re age 50 or over by the end of 2020).
But how to tell which type of IRA is best for you?
In talking with Kiplinger’s, Mari noted that “traditional IRAs may be best for people who need an immediate tax deduction or want to defer income in the hopes that their bracket will be lower in the future.”
That may include people expecting to retire shortly and those who believe their income will go down in future years.
To see which strategy is best for your personal situation, make sure to consult with your financial advisor.
And remember that, due to December 2019 changes in the retirement rules, you can now fund your Traditional IRA past age 70½ as long as you have earned income.
Financial Tip: Want to read the complete Kiplinger’s article with Mari’s comments? You can find it here.