Roth IRA vs. traditional ira Team 6The PitchThe ISSUEThe lay-down.The other lay-down.Look forward to it!ROTH IRA VS. TRADITIONAL IRATEAM 6Vicente C. Gonzaga & Erl MalboeufThe PitchYou are a 25-year-old newly-independent with an engineering degree and have landed a position with $60,000 gross annual pay. You estimate that your income will raise 5% every year, and you anticipate saving 10% of your annual salary for input into IRA retirement funds.The ISSUEWhich option do you choose?Traditional IRAorRoth IRAThis, folks, is where good ol’ economic analysis and some planning ahead can make a significant difference.We will analyze the net benefit of both options based on the given scenario and current/prospective taxation trends.The lay-down.ROTH IRAPros:Tax-deferred withdrawalsConsContribution cap per yearContributions are taxed based on income bracket (not on the size of the contribution itself)The oth er lay-down.Traditional IRAProsContributions are tax deferredContributions are not cappedConsTaxed on each withdrawalWithdrawals are taxed based on the withdrawal amountLook forward to
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