Roth IRAs: A Tax-Free Strategy to Increase Wealth!

<p>Roth IRAs are an excellent investment vehicle for most folks. The contributions are not tax-deductible, but <em>your capital gains are tax-free.</em> You can also withdraw your contributions at any point, without penalty, since you’ve already paid the taxes on that money. Those are two great advantages of Roth IRAs.</p> <p>Here a few more interesting tidbits you might not know about:</p> <p>1.You can use a Roth IRA to buy a house. You can take up to $10,000 of your earnings from your Roth IRA to put toward your home. The only catch is that you have to be a first-time homebuyer.</p> <p>Be aware of how much it might cost you in the long-term to take money out of your Roth IRA. At 10.5% interest, that $10,000 is worth over $155k in 25 years. It might be best to find another source of funds, if possible. Consider your retirement.</p> <p>2. Not everyone can get a Roth IRA. There are income limits and some people simply don’t qualify. The numbers can change from year to year, but for 2012, <em>if you’re single and make more than $125,000, you cannot contribute to a Roth IRA.</em> <em>Likewise, if you’re married and filing jointly, the income limit is $183,000.</em></p> <p>3. Dividends are free from taxes. Dividends on investments in your Roth IRA are not taxed. That might not seem like a big deal, but if you own a lot of dividend-paying stock, the amount can really add up over the decades.</p> <p>4. You can contribute this year and claim it was contributed last year. Any time before tax day (usually April 15th), you can make a contribution and claim it for last year. That means if you were a little short on funds last year, you can still make your contribution and have the option of making another contribution for this year.</p> <p>5. It can outlast you. <em>If you or your spouse happens to die, the two accounts can be combined without any penalty. </em>Whoever ever said the government never did anything nice for you didn’t know everything there was to know about IRAs.</p> <p>6. It’s inheritable. Your IRA can be pas