Though there are so many reasons for choosing Roth IRA, one of the primary reasons is the income in a Roth IRA being tax free, and not just the growth, but the distributions in retirement are also tax free!

This article explains the list of other benefits of opening a Roth IRA for your retirement and why you might consider an experienced IRA custodian to be able to enjoy all the following benefits. 

Unmatched Tax Benefits

The primary reason why most people get excited to open a Roth IRA is being able to avoid paying tax on distributions of income in retirement. 

The distributions in Roth IRA are not considered ordinary income; thus, it benefits the account owner (investor) since they are able to avoid higher tax rates. 

Roth is best for retirement as it potentially reduces the high annual tax bill in your golden years!

In a nutshell, investing in a Roth IRA can significantly reduce one's income tax liability in retirement. This is why most responsible IRA custodians, such as Quest Trust Company -who want to see their investors grow,  recommend investing in Roth IRA and ask you to perform Roth IRA conversions with your existing IRA or 401(k) investment plan.

Although there are several other retirement investment plans such as Self-directed IRA, you first need to compare the risks and benefits along with the eligibility criteria to pick the best-suited option for you. 

Easy Eligibility 

To be eligible for opening a Roth IRA or investing in Roth IRA, you must meet certain income requirements for annual contributions. 

As per new rules for 2020, married people who want to file jointly, their Modified Adjusted Gross Income (MAGI) should not exceed $206,000. And in case you're single/head of household, it shouldn't go over $139,000. If your MAGI is lesser than these amounts for your suitable condition, you are eligible to open or invest in a Roth IRA.

Don't be disheartened even if you don't fall in above-mentioned criterias!

You can still open a Roth IRA and perform a conversion with contribution (amount) from your existing IRA plan regardless of your MAGI.

Know Roth Conversions Better

Conversions are performed so that the people investing in Roth IRA can enjoy its benefits. Here's what you get when you choose Roth IRA over other IRAs to invest in:

• Your earnings through the investments grow tax free.

• Qualified distributions are tax free as well as there is an unlimited scope to earn more and more in retirement.

• You can withdraw your contributions at any time without tax or penalty. (There can be a few exceptions though).

• When you open a Roth IRA, you don't need to distribute a certain amount upon retirement. It further allows your funds to grow in your plan continuously.

• Once you complete 5 years of investing in a Roth IRA, your money grows unlimited.  

• Last but not the least, is if you're 59 ½ years or older, you can enjoy tax-free distributions from the earnings in your retirement account at any time.

Note: It's critical to choose a reliable, experienced IRA custodian to open a Roth IRA. Go for companies like Quest Trust Company since they are known for the best support, experience and expertise.