Question

Need some opinions! Eliza is a 60-year old woman who has been in the workforce for many years. She has made many investments over time as part of her retirement planning. But until now, she has no IRA. Eliza would like to add an IRA to her retirement portfolio. She can make contributions during her remaining 8 working years, but would like to maintain low-risk investments. At this stage of her career, Eliza is in a relatively high tax bracket, but she expects to drop to a lower tax bracket when she retires. At this point, which type of IRA would be best for Eliza, a Traditional or Roth IRA? Explain your reasoning

Answer 1

Traditional - It has a "Catch-Up" provision and her employer probably has a match for the first 3% of her salary.

Answer 2

Why not Roth IRA?

Answer 3

Because it doesn't have a catchup provision and her employer probably has no matching program for a privately motivated IRA. She can get the Traditional through her employer.

Answer 4

Thank you very much sir!