Roth IRAs

Introduction to Roth IRA's

Category:

Education

Tags:

• Roth
• IRA

[RikaKazak]

$3,400 doubled = $7,800???

[khanacademy]

@RikaKazak Thanks for pointing that out. I have annotated the video to point out that I can't multiply :)

[Prolocater]

cool

Hey Sal how did you get that ti-85 on your computer

[ftbscsmobfl17]

Half the stuff you said in the video isn't even true...I'm 17 and I have already put around $12,000 in my roth ira account. You don't have to pay taxes on the roth ira account,that's the entire point of it. Say your net income for the year 2011 was $7000, you can put up to $7000 in for that year. Since you have already been taxed on the money you made you don't pay tax. The drawback to Roth IRA's is that you can't touch the money in the account until you are 59.5. Early withdraws = huge taxes.

[lerox22]

do ROTH IRA'S earn interest like a savings account or do you have to invest in stocks and mutual funds in order for the money to grow?

[Secundas]

Flywithabel is right. A Roth IRA contribution is not taxed up front, you just don't get a tax deduction like you do with a traditional IRA. A $5000 contribution to a Roth IRA is still $5000 in that account, not $3400. Sorry, but this video is way off.

[disturbed30088]

can you explain the difference between a ROTH IRA and CERTIFICATES OF DEPOSIT????

[paulceltics]

good music

[gamevoodoo]

Due to the error pointed out by rikakazak, this video could be a bit misleading. No way Roth ira could end up with more money than the traditional ira if both were redraw at 60 years old. You don't gain more flexibility without "penalty" :-).

[flywithabel]

That 5k was already taxed before you put it into the roth account. So how does it become $3,400?! Are you saying you get taxed twice? I haven't read that anywhere.

[o2wow]

By the time you reach 59 you should have learned to live on what you make and keep your IRA earning for your retirement. Just like a 401K, the money is yours and if you die early it goes to your family instead of evaporating like a pension or a SS

[pgunn01]

Thanks. I've been curious about what the relevant factors are between the two for some time. I'm in my early 30s now, and it's nice to have some intuitions on how they compare.