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What type of retirement plan should a low income person invest in? August 21, 2011 Advisor 2 Comments. I am soo confused about how all the retirement plans work, like I am just brain twisted. Whats the difference between an IRA, ...
Whats the difference between an IRA, Roth IRA, Savings account, 401k plan. Should a person with low income have to deal with all this?
I don?t have a bank account yet but will be needing one right, and I already have a savings account thanks to my parents. Where or how much money should I be looking to put aside to any of these accounts per month?
Umm, I have social security, does that have to do with anything as well. I want to learn more about this so I can learn to save money in the future and spend it wisely. Thanks. Sorry soo many questions that need to be answered.
This is a no-brainer. Since you are young, you have many years ahead that your retirement fund will grow. By contributing to a Roth IRA, all the money you take out at retirement?both your contributions and the earnings?will be tax-free. Plus, you have full control over the Roth IRA and can invest the money in about any way you wish. It is not a tax-deductible contribution like a regular IRA is, but if you can afford to invest in a retirement plan at all, the Roth is the best, and overall lowest tax, way to go.
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