Summary
Roth IRA was started to help the lower income people to help them for their retirement, which could be done by saving in the Roth IRA till their retirement.
Benefits the young
A Roth IRA account is a good plan both for the very young and also the old. Setting up Roth for their retirement can be a rewarding move to consider at the tax time. Setting money aside does make sense, especially for the young as it can grow many folds in the future to put to good use. it provides an opportunity for the youngsters to engage in saving, particularly the young as this generation does not focus on investing.
The benefits that a youngster enjoys due to Roth are the compounding interest, which will definitely make his future secure. For instance if the youngsters contributes $2000 in the beginning each year for 50 years, the money at retirement age would be $1.2 million. The teenager will also benefit from lowest tax rates as it would be a good opportunity to pay taxes now than later.
Benefits for the grown ups
Even if one is not so young, the Roth can be benefitting if one has a tax bracket to be higher after retirement than it is. One can also contribute after the age of 70 ½ years of age, as the money still grows and increases your estate. One can benefit from the Roth IRA as it is an after tax-investment vehicle for retirement. The withdrawals are not taxed and the funds in the Roth account can be invested in various types like funds, securities and many more. Money can also be withdrawn without the money being taxed.
Roth IRA also does not have any withdrawal requirements, which means that you do not have to withdraw memory if you do not need it. You can let the money sit and grow. If you want to hand it over to your children, then that too can be easily done as you can name the beneficiary and they will receive the Roth upon your death.
Therefore all the Roth IRA investment for retirement is a good plan for the old and the young as in the end it is all yours tax free!