Author Topic: Roth vs Traditional IRA for Retired 50 year old?  (Read 864 times)

signhere

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Roth vs Traditional IRA for Retired 50 year old?
« on: August 02, 2016, 09:57:56 AM »
Hi - I convinced my mother to start investing (better late than never). She has a bunch of cash sitting in a checking account and would like to start contributing to an IRA.

She is retired and currently has no income. She will not need the money now or in the near future - we're just looking at it as a means of tax-advantaged investing.

Would a Roth or Traditional be better given the circumstances? Thanks in advance.

braje

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Re: Roth vs Traditional IRA for Retired 50 year old?
« Reply #1 on: August 02, 2016, 10:59:24 AM »
She can only contribute to a IRA IF she has earned income eg wages.

signhere

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Re: Roth vs Traditional IRA for Retired 50 year old?
« Reply #2 on: August 02, 2016, 11:38:54 AM »
Well she actually does have some income from a family business but it is minimal, so she's taxed on it at the lowest rate. Sorry for the confusion, I know I said above there is no income.

Rubic

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Re: Roth vs Traditional IRA for Retired 50 year old?
« Reply #3 on: August 02, 2016, 02:19:27 PM »
Well she actually does have some income from a family business but it is minimal, so she's taxed on it at the lowest rate. Sorry for the confusion, I know I said above there is no income.

Then it would make sense for her to contribute to a Roth IRA, either in the amount of her income or the maximum $6,5000 contribution limit, whichever is lesser.

seattlecyclone

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Re: Roth vs Traditional IRA for Retired 50 year old?
« Reply #4 on: August 02, 2016, 02:23:42 PM »
Yes, the main thing to consider with IRAs is whether your tax bracket is lower now or when you plan to withdraw the funds. If your tax bracket right now is 0%, you can't get much lower than that, so Roth generally makes a lot of sense.