Content provided courtesy of USAA.
Tax-free income in retirement: That's what Roth retirement accounts are all about. And that's why, when you're choosing an IRA or enrolling in a retirement plan, you should consider what a Roth could do to brighten your retirement picture.
First, it's important to understand their appeal.
"That starts with the fact that qualified withdrawals are completely free from federal income tax," says Sean Grindall, assistant vice president for USAA retirement and wealth solutions.
That means every dollar in your Roth can be used for your retirement needs — unlike traditional IRAs and 401(k)s, where withdrawals generally come with a tax bill attached. Roth IRAs also boast these benefits:
Interested in adding a Roth to your retirement mix? Here are three ways to do it:
Before converting, Grindall advises considering: