Choosing the correct type of IRA is important for your future - Beckley, Bluefield & Lewisburg News, Weather, Sports

Choosing the correct type of IRA is important for your future

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    One person injured after ATV accident in Fayette County

    Saturday, August 30 2014 4:37 AM EDT2014-08-30 08:37:47 GMT
    Emergency crews were called to the scene of a ATV accident, just before 10 pm Friday.According to Fayette County 911 the ATV was struck by a vehicle along the 1900 block of Rt 60 Anstead area of Fayette County.One person was transported by helicopter, to a local hospital for treatment, The extent of those injuries or what caused the accident is not yet known at this time.The Fayette County Sheriff Department is investigating.
    Emergency crews were called to the scene of a ATV accident, just before 10 pm Friday.According to Fayette County 911 the ATV was struck by a vehicle along the 1900 block of Rt 60 Anstead area of Fayette County.One person was transported by helicopter, to a local hospital for treatment, The extent of those injuries or what caused the accident is not yet known at this time.The Fayette County Sheriff Department is investigating.
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    Intruder Kicks in Door at Apartment in Beckley

    Friday, August 29 2014 11:27 PM EDT2014-08-30 03:27:05 GMT
    Beckley Police are searching for two suspects after a burglary at the Lewis Ritchie Apartments in Beckley around 10:00 Friday night (8/29). 
    Beckley Police are searching for two suspects after a burglary at the Lewis Ritchie Apartments in Beckley around 10:00 Friday night (8/29). 
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    21st annual Beckley's Kids Classic Festival kicks off Saturday

    Friday, August 29 2014 6:22 PM EDT2014-08-29 22:22:20 GMT
    The 21st annual Beckley's Kids Classic Festival kicks off Saturday with the Autumn Fest at Lake Stephens.
    The 21st annual Beckley's Kids Classic Festival kicks off Saturday with the Autumn Fest at Lake Stephens.
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  • Does Lady Justice often peek from her blindfold?

    Does Lady Justice often peek from her blindfold?

    Saturday, August 30 2014 6:00 AM EDT2014-08-30 10:00:12 GMT
    Not knowing it would be her last day of life, the woman with long dark hair dressed to go out for the evening. I heard our neighbor's door slam as she left the house. She wore a white blouse and a pencil skirt of dark blue. High-heels and Navy blue pantyhose underscored her outfit.
    Not knowing it would be her last day of life, the woman with long dark hair dressed to go out for the evening. I heard our neighbor's door slam as she left the house. She wore a white blouse and a pencil skirt of dark blue. High-heels and Navy blue pantyhose underscored her outfit.
  • Ex-Im's choices of winners, losers hurts overall business

    Ex-Im's choices of winners, losers hurts overall business

    Friday, August 29 2014 6:00 AM EDT2014-08-29 10:00:19 GMT
    In recent years, the Export-Import Bank of the United States has drawn heavy criticism. Officials from the bank have gone on a nationwide barnstorming campaign to build support as many congressional Republicans consider shutting the public credit giant down via defunding it.
    In recent years, the Export-Import Bank of the United States has drawn heavy criticism. Officials from the bank have gone on a nationwide barnstorming campaign to build support as many congressional Republicans consider shutting the public credit giant down via defunding it.
  • Advances in technology can be both hazardous, helpful to your health

    Advances in technology can be both hazardous, helpful to your health

    Thursday, August 28 2014 6:00 AM EDT2014-08-28 10:00:20 GMT
    “Sometimes I think I spend 80 percent of my time undoing what other people tell my patients,” Dr. Bob groaned after I recently asked him if I should increase my daily intake of a certain medicine now in my daily regime.
    “Sometimes I think I spend 80 percent of my time undoing what other people tell my patients,” Dr. Bob groaned after I recently asked him if I should increase my daily intake of a certain medicine now in my daily regime.

This article was prepared by Northwestern Mutual with the cooperation of John A. Barnes. The information is not considered legal or tax advice. Please consult your tax attorney. Barnes is a financial advisor with Northwestern Mutual, the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, Wis., and its subsidiaries. Barnes is based in Morgantown.  To contact him, call 304 292-3339, email j.a.barnes@nm.com, or visit jabarnes.nm.com.

Investing for retirement is one of the most important things you can do for your future. Yet an employer-sponsored savings plan, such as a 401(k), may not be enough to provide the savings you need. For many, an individual retirement account is one of the best ways to accumulate additional retirement savings on a tax-advantaged basis.

There are two main types of IRAs: Traditional and Roth. Both have the same contribution limits, the same catch-up provisions for people age 50 and older (for this year's amount, go to the Internal Revenue Service website, www.irs.gov), and both allow your investment earnings to compound tax-deferred until you start taking withdrawals, typically at retirement. 

To help determine which IRA is right for you, consider how they differ. 

Eligibility

You can contribute to a traditional IRA provided you (or your spouse, if you are married and file jointly) have earned income and you will not turn age 70 1/2 by the end of the year. In contrast, Roth IRAs are subject to income limits, which means not everyone can take advantage of one. To learn more about your eligibility, consult the IRS website at www.irs.gov. 

Deductibility

Contributions to a traditional IRA may be tax deductible, subject to certain requirements. And any contributions you make may help lower your taxable income in the year in which you make them. With a Roth IRA, contributions are made with after-tax dollars, meaning the money you contribute has already been taxed, with no benefit of a deduction. 

Other tax advantages

When money is taken from a Roth IRA at retirement, it's potentially tax-free — and that includes your tax-deferred earnings. That's different from a traditional IRA, which is fully taxable at current tax rates when withdrawn. 

Traditional IRAs require you to begin taking minimum required distrbutions at age 70 1/2 — whether or not you need the money. If you fail to take your distribution, you'll face stiff penalties.

In contrast, Roth IRA owners are not subject to mandatory withdrawals at age 70 1/2. This means you can extend the tax advantages of your account longer than with a traditional IRA. 

Which is better?

One rule of thumb suggests that if you think your tax rate today is higher than it will be in retirement, a traditional IRA may make sense. Conversely, if your tax rate is lower than you think it will be in retirement, a Roth IRA may be the better choice, assuming you qualify for one. However, because everyone's situation is different, be sure to consult with a financial representative or tax professional to carefully weigh all the factors and determine which IRA is best for you.