Hello Sullivan Investments Community!

We hope you’re off to a healthy and prosperous start this November.

This week, we’re diving into a vital aspect of financial planning: retirement. Specifically, we’re exploring the intricacies of Traditional and Roth IRAs, two prevalent retirement account options. While they share several similarities, each has unique features that could sway your decision based on your individual financial goals and circumstances. Remember, it’s always a wise move to consider your retirement planning options, regardless of your age or stage in life. Alongside this guide, we encourage you to do your own research to find the best retirement planning options for you. Consider this as a foundational step to kickstart!

Let’s begin by examining what Roth and Traditional IRAs have in common. Both are fundamental tools designed for retirement savings. They share a contribution limit of $6,500 annually, which increases to $7,500 for individuals over 50, thanks to the “catch-up contribution” provision. It’s also worth noting that both IRAs allow contributions at any age, and withdrawals before age 59 1/2 typically incur a 10% early withdrawal penalty, barring certain exceptions.

Now, let’s pivot to their differences, which are crucial in deciding which account suits you best. One key distinction lies in how contributions are taxed: Roth IRAs use after-tax dollars, meaning you pay taxes now but withdraw funds tax-free later. In contrast, Traditional IRAs use pre-tax dollars, deferring taxes until you withdraw the funds. Regarding withdrawals, Roth IRAs do not mandate distributions at any age, while Traditional IRAs require minimum distributions starting at age 73.

A vital factor in choosing between these accounts could be the income limits for Roth IRAs, which are $150,000 for single filers and $228,000 for married couples. Exceeding these limits may necessitate considering a Traditional IRA or other retirement savings options.

We wish you a wonderful Thanksgiving and encourage you to reflect on these retirement planning strategies as you enjoy the holiday season.

Sullivan Investments Group

**Disclaimer**:

This blog post is intended for educational purposes only and does not constitute financial, investment, legal, or other professional advice. The views, information, or opinions expressed in this article are solely those of the author and do not necessarily represent those of Sullivan Investments Group LLC. Readers should not rely on the information provided in this article as the basis for making any business, legal, or financial decisions. Before taking any action based on this information, we recommend consulting with a qualified professional or expert in the relevant field. Sullivan Investments Group LLC is not responsible for any errors or omissions, or for any actions taken based on the information provided in this article.

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Always do your own due diligence and consult with a licensed investment professional before making any investment decisions.