Retirement planning can be a confusing and stressful thing to do, and as such, most people just never get around to doing it. If I ignore it, it will just go away right? The government, after all, will take care of me until I’m old and gray!
Today, I thought I’d talk about one retirement plan option that is getting a lot of hype lately, the Roth IRA, and explore some reasons why you should NEVER get involved with one of these retirement accounts (tongue in cheek).
5 Reasons A Roth IRA Is Not For You
Roth IRAs are just an overhyped retirement plan type that you should never think about using. Here’s 5 reasons why you shouldn’t.
- You don’t like having tax free withdrawals at retirement: With the Roth IRA you’re putting your contributions in after you’ve already paid taxes on the money, and as such, you won’t have to pay taxes on any money that you withdraw at retirement. That’s just silly – I want to pay more taxes at retirement!
- The government will have you covered: If you’re like me, you know you don’t really even need to save for retirement, after all the government will foot the bill via your social security payments. In fact, my last statement suggested that I could live high on the hog in retirement with an estimated $2000 a month. That’s $24,000 a year! That’s gonna be some sweet livin!
- You prefer the limited mutual fund options via your 401k: You already have a 401k with your company, and you prefer not having so many options of things to invest in. Those 2 mutual funds you are able to choose from in your 401k should be just fine!
- Roth IRAs are just too flexible: You don’t like that you can withdraw your contributions for no reason, or that you can use the account to save for a child’s education. Why have all those options available? You prefer a rigid, inflexible set of rules that you can follow.
- You don’t want to diversify your tax situation: Some people like to fund both a Roth IRA and a traditional IRA or 401k in order to their bets against future tax rate changes, after all who knows where the tax rates will be in 30 years? You think you do, you don’t need personal tax software and you’d prefer to put all your eggs in one basket, thank you very much!
Ok, now that we’ve looked at all the reasons why you should never open a Roth IRA, I should probably put this out there. I don’t agree with anything I just wrote. The above points are all reasons why I think Roth IRAs are a great idea.
To read more about Roth IRAs and other retirement account options, check out theses posts:
- Personal Finance Basics: The Power Of Compound Interest
- Roth IRA Withdrawal Rules
- Roth IRA Basics
- How To Open A Roth IRA And Where To Open An Account
- Traditional And Roth IRA Contribution Limits And Phase Outs
- Things You Should Know About The 2010 Roth IRA Conversion Rules
- What Type Of Retirement Account Should I Choose? Traditional IRA, Roth IRA And 401k
Last Edited: 4th January 2012