Basic Comparison Between a Traditional and a Roth IRA

		Traditional IRA		Roth IRA
Contributions		Pre-Tax Money		After-Tax Money
Investment Growth		Grows Tax-Exempt		Grows Tax-Exempt
Distributions in Retirement		Taxed		Not Taxed
Required Minimum Distributions		Yes, Beginning at Age 70		No

  

An IRA and/or a Roth IRA are a Great Way to Put Aside Money for Retirement.  The chart above is a basic comparison.  You should consult an advisor and/or tax professional to determine which account is in your best interest as well as to learn the tax implications of premature distributions. 

(Chart Produced by the Independent Financial Solutions Group)

Disclosures:

1. I.F.S.G. is a fee-based registered independent advisory specializing in investments and life insurance solutions.
2. I.F.S.G. does not give tax advice. You should consult your tax professional before making any financial decisions. 
3. Securities provided by Trade PMR. Fixed income products provided to Trade PMR by Advisor Asset Management, Crew & Associates, and JBB Financial.
4. Investing Money in securities exposes investors to risks including loss of principal and past performance is not an indicator of future returns. Investors should carefully consider investment risks, objectives, charges, and expenses.

Investment Categories Explained in Simple Terms

Investments can be difficult to understand due to the huge amounts of jargon that is out there. The simplest way to understand any investment is to consider its purpose. Basically, what does this investment do? Below is a simple way to categorize investments according to what it does.

1.  Growth- These are investments that grow in value over the long term.  Examples include small and mid-sized company stocks as well as mutual funds and exchanges traded funds containing these stocks.

2.  Growth and Income- These are investments that grow in value over the long term and pay dividends as income.  Examples include large company stocks as well as mutual funds and exchange traded funds containing these stocks.

3.  Balanced- These are investments that contain a mixture of stocks and bonds and pay dividends as income.  Balanced investments are mostly Balanced and Equity-Income Mutual Funds.

4.  Income- These are investments that pay income through fixed income securities.  Examples include bonds, bond mutual funds, and bond exchange traded funds.

5.  Cash- These are investments that preserve money.  Examples included money markets and savings accounts.

Hopefully, these categories will help increase your understanding of what the types of investments do. 


Matt Dressel is the Owner of the Independent Financial Solutions Group. If you have any questions about this article, he can be reached at 252-515-0242 or matthewdressel.ifsg@gmail.com

Disclosures:

1. I.F.S.G. is a fee-based registered independent advisory specializing in investments and life insurance solutions.
2. I.F.S.G. does not give tax advice. You should consult your tax professional before making any financial decisions. 
3. Securities provided by Trade PMR. Fixed income products provided to Trade PMR by Advisor Asset Management, Crew & Associates, and JBB Financial.
4. Investing Money in securities exposes investors to risks including loss of principal and past performance is not an indicator of future returns. Investors should carefully consider investment risks, objectives, charges, and expenses.