Are you looking at getting into an IRA before April 15th? I am told that I can save over $1200 in taxes if I put $4000 into an IRA. Anyone know a bit more on this subject? What do you see as the best type of IRA at this point for someone in their thirties?
Save more on your taxes with an IRA.
Which IRA would depend on your tax bracket. It sounds like your tax person is thinking of a traditional IRA, which is “tax defferred” as opposed to a Roth IRA which does not lower your tax obligation now, but the principle and growth are not taxed later. There are other kinds of IRAs that I am just not familiar with at all (simple is another kind). I would recommend talking to an expert on this, like a CPA and a retirement planner.
The advantage of an regular IRA is you get a tax deduction NOW and it grows tax deffered. You pay taxes on the money when you take it out.
A Roth IRA does NOT give you a deduction now BUT you pay NO TAX when you take the money out. One IRA custodian calls this paying tax on the seeds not on the crop. Personally I like this approach better. If you think you will be in a high tax bracket when you retire or you can invest your money at very high returns this will probably work out better. Also the longer you invest the more benefit to the Roth.
I use a “self Directed” IRA to invest in real estate.
The absolutely most important thing is to start investing early and consistently. Every year you wait to start investing will dramatically effect the ammount you have at retirement.
If you can do it put that $4000 into an IRA whether it is a Roth or regular is not as important as whether you contribute or not.
Can you provide more information on this? So far the info in your post is jaw-dropping . In the mean while I think im gonna stick around and read about 2 more of your posts. ttyl