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Matt Hedley Shares the Advantages to Contributing to a Roth IRA

Roth IRAs can help you keep more investment growth on your retirement investments. You don't have to pay income tax on investment gains or interest earned within your Roth IRA each year.

Roth individual retirement accounts allow you to pay income tax on your retirement savings upfront. This means you can take out funds later without worrying about the tax bill, provided you meet the requirements. Roth IRA owners are often allowed to take tax-free distributions in retirement and can completely avoid paying taxes on their investment growth.

Matt Hedley, Vice President, OneDigital Retirement + Wealth in Richmond, recently contributed to a piece prepared by U.S. News and World Report on the advantages that can come from contributing to a Roth IRA.

One such advantage is easier access to your money. Traditional IRA withdrawals before age 59 1/2 could result in a 10% early withdrawal penalty in addition to income tax on the amount withdrawn. Roth IRA early withdrawals may trigger a 10% penalty and income tax only on the portion of the withdrawal that comes from investment earnings. However, you can withdraw funds you contributed to the Roth IRA if the account is at least five years old.

Your contributions or principal can always be withdrawn penalty and tax-free regardless of age.
Matt Hedley, Vice President, OneDigital Retirement + Wealth, Richmond

To read about more ways Roth IRAs can help you keep more investment growth on your retirement investments, click here.

Matt's commentary about Roth IRAs also appeared on WTOP News.

For additional resources on this topic, check out How the New Roth Contribution Rule Impacts Your Employees.

Investment advice is offered through OneDigital Investment Advisors LLC, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.