Should I invest in a Traditional IRA or a Roth IRA?

I recently started my first job after graduating from college. I have the option to invest in a Traditional IRA or a Roth IRA. I'm 25 years old. Which do you suggest?

Investing, IRAs, Starting Out
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September 2017
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This is a great question and one we hear quite often.  Congratulations on starting your career after college and thinking about your future.  You are well ahead many of those at a similiar life stage.

I would recommend that you consider using the Roth IRA at this point in time.  You are young, have a long time horizon and are most likely at a relatively low tax bracket.  You did not include what your expected earning are going to be so just making an educated guess.  Although you will not receive a tax deduction today, like you would with the IRA, you will benefit from tax free accumulation and distribution if you follow the rules correctly.  This could benefit you far greater than the small deduction you would receive today.

There may come a point in time, hopefully, in the future that your income will be too high to qualify for a Roth IRA contribution.  This is yet another reason to contribute to a Roth now.

It may be worht a call to your tax advisor to simply confirm this based upon your actual tax situation.

Best of luck in making your decision and your future!

September 2017
September 2017
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September 2017