Roth IRA

[Sean Dulcio]

is a Roth IRA a good investment ?

[Brian Eastman]

@Sean Dulcio

That is an entirely open ended question with no specific answer.

A Roth IRA is a very powerful tax vehicle that can be used to create significant tax-free wealth.

When you put money in, you are taxed at your regular income rate on the contributed amount.  There is no tax-deferral as with other conventional retirement plans.

However, all future growth through investment returns, and any distributions you take from the account in retirement are tax free.

The following calculator would compare the difference in net post-tax income to you by comparing into a tax-deferred "traditional" IRA or a Roth IRA.

http://dinkytown.net/java/RothvsRegular.html

The other piece is that the IRA in and of itself is not really a good or bad investment. The investments you make with the IRA will determine the beneficial impact.

A Roth IRA may be invested in traditional stocks, etc, or be configured as a self directed IRA with the potential to invest in non-traditional assets such as real estate, notes, tax-liens, etc (in addition to stocks). The higher your return on investment, the more beneficial the Roth tax structure becomes as compared to a traditional IRA or after-tax investments.

Research and consultations with a (preferably fee based) financial planner and tax advisor such as a CPA will be the best way for you to learn about how you can best configure your situation into an investment strategy that will produce beneficial long term results.