Summary:
On this episode of the Wealth Equation podcast, Maurice discusses the mighty Roth IRA and explains why he thinks everyone should invest this way. The Roth IRA was originated by two US senators in 1989, but it didn’t become accessible to the public until 1997. This type of retirement account was created to allow people to contribute money after taxes and not be taxed on the earnings acquired through the investments or when they withdraw their funds.
These accounts are advantageous because of these tax savings, the ability to withdraw the funds whenever you’d like as long as the account is at least 5 years old and you are 59.5, and the function of being able to contribute for the previous year all the way up to the tax deadline. The drawbacks mainly revolve around income limits, but Maurice will discuss the ways to get around those limits on a future episode. Maurice recommends that people invest in Roth IRAs sooner rather than later because he wouldn’t be surprised if the IRS puts more stringent restrictions on these accounts in the coming years.
Key Quotes:
“If you could pay less money in taxes, would you take home more money?”
“The accounts have gotten popular, but, in my opinion, not popular enough.”
What We Covered:
0:42 – Introduction to the mighty Roth IRA
1:11 – History of the Roth IRA
2:32 – What is an Individual Retirement Account?
4:26 – Benefits of the Roth IRA
6:28 – What kinds of investments should you put into it?
7:53 – Downsides of the Roth IRA
8:49 – The future of the Roth IRA
Connect with Maurice:
https://www.wilsonwealth.com/
https://www.linkedin.com/in/mauricewilson
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