Phil Cannella • Phillip Cannella
Phil Cannella – Phillip Cannella Media: Phil Cannella, Retirement Media, Inc. is releasing its Phil Cannella IRA tips. In this article, we will be discussing the difference between a traditional IRA and a Roth IRA.
Phillip Cannella • Phil Cannella
Phil Cannella has long been a proponent of the Roth IRA, and we would be remiss if we did not discuss its value as a vaccine against future taxes. According to Phil Cannella, IRA accounts are an important cornerstone to any retirement plan.
“The problem with a traditional IRA is that they are tax-deferred, rather than tax-exempt,” says Cannella. “With a traditional IRA, you do not pay taxes up front when you make a contribution.”
“All this adds up to a huge tax bill for you when you reach retirement age,” says Phil Cannella.
Traditional IRA accounts require you to take a Required Minimum Distribution (RMD) starting at age 70½. An RMD is the minimum amount you are required to take from your IRA each year after that age. The problem is that this money is counted as income and is taxed as such. Holding a traditional IRA will increase your tax liability each year you are required to take a distribution. It could even push you into a higher tax bracket.
According to Phil Cannella, IRA accounts are best when tax-exempt– like a Roth.
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