Discover the tips and strategies that will help you achieve your retirement goals.

I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.

It all starts right here is Ready for Retirement, and I'm your host,

James Cannell. And the topic for today's episode is Roth IRAs. And more specifically,

seven things that you need to know about Roth IRAs to use them effectively

in your retirement planning. I think a lot of people know what Roth IRAs are, generally speaking,

but there's so many unique things know about Roth IRAs, especially when it comes to planning

your retirement, that I thought it would be best to dedicate an entire episode to understanding

what some of those things are. So just a general background, what is a

Roth IRA if you don't know? Well, what a Roth IRA is is it's a retirement account where you can

save money and have that money grow tax-free. So with a Roth IRA, an individual retirement account,

any money that you contribute to it, you don't get a tax deduction for doing so, but as that money

grows, it grows completely tax-free. And when you take that money contribute to it, you don't get a tax deduction for doing so, but as that money grows,

it grows completely tax-free. And when you take that money out in retirement, it's also tax-free.

For example, let's say that for 20 years, you contribute $5,000 to a Roth IRA. So every single year,

you contribute $5,000, and let's just assume that that money grows at 8% per year. Well, over the course of those 20 years,

you would have put in $100,000 of your own money. That was a $5,000 contribution times 20 years.

But if you were growing that money, if it was invested and grew at 8% per year, you would have $229,000

by the end of that period. So there's $129,000 of growth on those contributions that that's going to come out and that's

completely tax-free.

If that was any other type of account, whether a brokerage account or an IRA, either all or

portion of that is going to be fully taxable.

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