America First's Roth IRA may be for you if you'd prefer to pay taxes on your retirement now instead of later. Your options include opening a Roth IRA Accumulator, with no minimum deposit required; a Roth IRA Certificate with a $500 minimum deposit; and/or a Roth Dedicated Savings Account with no minimum deposit and an automatic transfer of at least $10 per month.
Benefits of Roth IRAs:
The following chart demonstrates the additional benefits of a Roth IRA:
|Years in IRA||5||10||15||20|
|Roth IRA||Total available for tax-free withdrawals after age 59½.|
|Traditional IRA||Total available after tax if tax rate becomes one of the following at retirement:|
|* Based on contributions of $2,000 at the beginning of the year for 5, 10, 15, or 20 years with earnings compounded annually. Assumes proceeds are withdrawn without penalty at year-end.
Traditional IRA figures assume you are in the 28% tax bracket when the contributions are made and shows how much is available after tax if your tax rate drops, holds steady, or rises. Traditional IRA balances assume the annual tax savings were reinvested in a taxable account and combined with the IRA balance upon withdrawal.
Source: Deloitte and Touche
|If tax rate drops to 15%||$13,849||$35,162||$63,242||$105,182|
|If tax rate stays at 28%||$12,446||$30,249||$55,763||$92,401|
|If tax rate rises to 31%||$12,122||$30,391||$54,036||$89,451|
|If tax rate rises to 36%||$11,581||$27,910||$51,157||$84,533|
|If tax rate rises to 39.6%||$11,191||$26,795||$49,084||$80,992|
Which IRA is right for you? Review the chart below to see whether the Traditional or the Roth IRA will benefit you most.
|Roth IRA*||Traditional IRA*|
|* Subject to IRS provisions. Please consult your tax advisor. Source: CUNA Brokerage Services, Inc.|
|Tax-deductible contributions?||No.||Maybe. Deductible contributions could be phased out as adjusted gross income increases.|
Earnings grow tax-deferred?
|Yes. Possibly tax-free.||Yes.|
Maximum annual contribution for IRAs?
Required minimum distribution rules?
Contribution allowed after age 70½?
|Yes, while you receive earned income.||No.|
A Roth IRA might be right for you.