When saving for the future, many people like to use traditional IRA’s or individual retirement accounts. These accounts are formed to receive pre-tax deposits and the accounts accumulate tax deferred. The account holder will have to pay future taxes on this account upon reaching 59 1/2, not only for the % gain the account earned, but also on the principal invested throughout the years. This sounds like a plan, however, I have a question for you. Do you think taxes will stay the same, be lower or higher in the future? If you think taxes will be higher in the future, I’m right along with you.
Made available in 1997, Florida Roth IRA’s came into existence. Florida Roth individual retirement accounts give the same tax-deferral as a traditional IRA, but the principal money deposited is made with after-tax money. The nice thing about doing this is that you will not pay taxes on the back-end in retirement. If you hold the funds long enough in the account, you can receive tax free distributions. Contributions are $5K per single and $10K per couple, split between two accounts. There is a catch-up contribution for people over 50.
You don’t have to withdraw money from a Florida Roth IRA at 70 1/2, so you can keep the money in the Florida Roth IRA longer than the traditional IRA. To receive tax free treatment, you must not take a distribution until you are at least 59 1/2 and their must have been a Florida Roth IRA open in your name for 5 years or more. To be clear of a penalty free withdrawal, the owner of the account must be deceased, if you are a first time home buyer, or if you suffered an injury or illness rendering you totally disabled.
Contact me at 352-200-2066 for any questions you may have regarding a Florida Roth IRA, or Florida individual retirement account. I can show you what vehicles to use to accomplish the results you are looking for.
My website is located at: www.rtcinsuranceadvisors.com.