Becoming a Millionaire: Roth IRA vs Traditional IRA (Which makes the MOST PROFIT)

So, what’s the difference between a Roth IRA (Individual retirement account) and a traditional IRA when it comes to becoming a millionaire. Which one is better?

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Key Questions Answered
1. Traditional: Taxed as ordinary income when withdrawing but you can deduct your contribution every year up to 6k currently in 2019.
2. Roth: no tax deductions from contributions but are not taxed when withdrawing
3. Simple: With Traditional IRAs, you avoid taxes when you put the money in. “With a Roth IRA, in retirement you won’t have to pay any taxes upon withdrawals of funds,”
4. Taking money Out: Traditional Mandatory withdraws by age 70 and ½
– Roth: can be held for an entire lifetime without needing to take it out
– Both: you can start taking money out by 59 and ½
5. Hidden Perks: you can have your kids inheret the Roth IRA, they can cash out tax free, or add it there Roth, or receive annual payment for the rest of there life.
– Traditional: you can withdraw 10k if under 59 ½ as a first time home owner bonus or for hardships and other disasters
– Roth can widraw contribution no problem but not the profits at anytime ( also same homebuyer 10k penalty free)
– Roth can be invested in Index funds, lifecycle funds, individual stock etc

Estimates
1. Inflation: 2% every year. 1million in 2061 = $435,304 would be in todays money
2. Contribution: 6k every year for 42 years at a 7% interest rate = $1,383,793.44
3. Daily Investing: $16.67
Ideas:
Imagine:
Link: https://smartasset.com/investing/inflation-calculator#zJ7qyU95qA
https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator
*Pro Tip*
Information is key

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