Month: April 2021

It is typical for people to turn to “common wisdom” when looking for answers to major decisions about money. But this is a mistake because each financial situation is unique. You cannot maximize the success of a financial plan by simply following rules of thumb. One such rule I frequently hear, purports to simplify the usefulness of a Roth to: it only makes sense if you are young. Rules of thumb like this make Certified Financial Planner™ professionals like me cringe. Successfully navigating the complexities of our financial system depends on how well you know your players and how creative you can be in your strategy. When used properly, a Roth IRA, Roth 401(k) and Roth conversions can be the queen in your financial chess game, at any age. So, what makes the Roth so special?  Tax-Free Growth While after-tax monies are used to fund Roth contributions, earnings grow tax-free. The longer the investment time horizon one has, the greater the potential for tax-free appreciation, which is why it is commonly considered a tool only for the young. Do not forget, however, that even a retiree may have a time horizon of thirty years or longer during which their money