Is a Roth IRA right for you?
Is a Roth IRA a good option for you to consider? Let’s review some key features of a Roth to help you decide if it would be an appropriate addition to your employer's retirement plan.
Taxes now vs. taxes later
Like a traditional IRA, your earnings will grow tax-deferred with the Roth option. Unlike a traditional IRA, a Roth requires you to pay taxes up front when you make contributions in return for tax-free withdrawals when you retire. So you’ll have to weigh your options and decide whether paying taxes now or taxes later benefits you. Remember: With a Roth IRA, you won't be able to use contributions to lower your current taxable income for the year.
No Required Minimum Distributions
With a traditional IRA, you must begin withdrawing funds April 1 the year after you attain age 70½ (referred to as Required Minimum Distributions). A Roth IRA doesn’t have this restriction, which allows you to stay invested for a longer period of time.
Potential early withdrawal feature
With a Roth IRA, you may be able to withdraw contributions (not earnings) before age 59½ for certain hardships. A traditional IRA doesn’t offer the same flexibility. However, even though this may be considered a benefit, it is important to remember that taking potential income from your future is rarely a good idea.
You can learn more about features of a Roth IRA, including which hardships qualify for early withdrawals, by visiting the IRS website. And if you decide the Roth option is right for you, visit GuideStone’s IRA webpage to learn about the benefit of a Right Choice IRA™ through GuideStone.
As always, if you have any questions, you can contact GuideStone at 1-888-98-GUIDE (1-888-984-8433) between 7 a.m. and 6 p.m. CST Monday-Friday.
You should carefully consider the investment objectives, risks, charges and expenses of GuideStone Funds before investing. For a copy of the prospectus with this and other information about the funds, please download a prospectus or call 1-888-98-GUIDE (1-888-984-8433). You should read the prospectus carefully before investing.
IRAs are made available through GuideStone Financial Services, member FINRA. Shares of GuideStone Funds are distributed by BNY Mellon Distributors Inc. GuideStone Funds and GuideStone Financial Services are controlled-affiliates of GuideStone Financial Resources.
This information should not be considered tax or legal advice. GuideStone stands ready to assist your organization as you work with your legal and tax advisers by providing resource information that you and your adviser may find beneficial.