You have worked hard and now realize that you need to save for your future retirement. You want to start early so that your money grows. You decide to save $2,000 each month. You have heard that you can choose a Traditional Individual Retirement Account (IRA) or one called a Roth IRA. Follow the link below to leam more about Traditional and Roth IRAs. You may also use a search engine with the following key words: traditional, IRA, roth.
Answer the following questions about your $50,000 a year salary.
1. If you choose a Traditional IRA, how much income will you pay taxes on?
2. If you choose a Roth IRA, how much income will you pay taxes on?
3. Why might it be advantageous to choose a Roth IRA over a Traditional IRA?
4. What do you need to consider before you convert your Traditional IRA to a Roth IRA?