Categories: CommentaryInvesting

5 Reasons Why You Should Never Open A Roth IRA

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).

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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.

  1. 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!
  2. 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!
  3. 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!
  4. 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.
  5. 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:

This post was last modified on July 5, 2013, 2:40 pm

Mr. Money :I’m a thirty-something Christian Midwestern father of one son, and have been happily married for 9 years to my beautiful wife. I love playing tennis, shooting hoops, or taking part in the occasional flag football game. Of course, I love writing and financial topics as well, and that's how this site came into being! Check me out on Google +!

View Comments (22)

  • Good one. For most people, I recommend a Roth, so I was really curious to see your arguments against it. Nicely done.

  • More people have been making Roth IRA conversion rates part of their retirement planning strategies in 2010. The prospect of higher taxes enacted by Congress after the mid-term elections is increasing Roth IRA conversions.
    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! just take time to understand this first sentence given. that may give all of us idea.

  • LOL, classic! You sure had me here. I was like, "wtf is this guy talking about not wanting a Roth."

    Good one and good points for those that don't like the benefits of the Roth.

  • HaHa. Came here from the Yakezie site. This post's satirical spin is similar to how I write for my Satirical Sunday theme. I'll be sure to link you in.

  • Very nice twist at the end there! I was about to say.."I think this is the first article I've ever seen saying something negative about a Roth IRA" haha

  • Awesome twist! I had to re-read your post just to make sure we were on the same page. Perhaps you should work on a movie script. Will do gangbusters at the box office. :)

  • I have to agree about this being a nice twist. As I was reading it, I was like, the author must be sarcastic about these reasons. As William had put it, too many people look at this stuff as too tough to deal with like the following excuses I got from people:

    It's too complicated
    It's too detail oriented
    It's too much work
    It takes too much time to do

    For me, I only know how to get through life by getting nitty gritty with the details, bring it up to the summary level, and break it all down again so as to be able to see what needs to be done and in what time order fashion relative to what all I have to work with. There are those times when one little detail can really change the course of actions.

  • Haha. Echoing other commenters: this is an awesome post. I was also surprised when I first saw the title, because I've never heard anything bad about a Roth IRA before.