Ask The Expert: Contributions

Q:
Asked by Kathy 11/18/12

I turn 53 this month and have no other retirement fund other than a traditional 401(k). At my age, is there any point in starting a Roth IRA?

A:
Answered by 11/20/12
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It obviously depends on your particular financial circumstances, but generally speaking, opening a Roth can be a good option, regardless of age. That may particularly true this year, because a Roth is most valuable when your think you taxes will be higher during retirement. It seems likely that taxes will go up in the coming years; with a Roth, you’d be paying the cheaper taxes this year and withdrawing them tax-free during retirement (when rates may be higher). Since you can make withdrawals beginning at 59 1/2, you’ve got a shorter window in which to make a guess at the direction of taxes. If you decide to make a contribution for 2012, you actually have until the April 15, 2013 tax deadline to make it.

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