Marguerita-Cheng-9-Why should I have an IRA vs other retirement account options
In this video, Marguerita Cheng explains that while an employer-sponsored retirement plan is the best place to start saving—especially with a company match—investors should also consider both Traditional and Roth IRAs to achieve tax diversification and balance current and future tax savings.
Video Transcript
The best place to start saving for retirement is through your employer sponsored plan. However, if you don't have access, it doesn't mean you can't save for your retirement and build wealth for your future. Can open an IRA. The next question is, Roth IRA or Traditional IRA?
It depends on your situation. Meaning, you need tax savings today or do you want tax savings in the future? If you only had one hundred dollars to save for retirement, the best place for you to go is your employer sponsored retirement plan, because there may be a match and you get tax savings today. If you have more than you can save, it does make sense to have pre tax money as well as post tax or after tax.
Why? We know about investment diversification, but tax diversification can be just as important. You save money today in taxes and you also save money in the future in taxes.
