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Which is better? A Roth IRA or a regular IRA? - MSN.com
The two key differences between a Roth IRA and a regular IRA are that you pay taxes on your contributions to a Roth, and with a regular IRA, you pay taxes on your withdrawals. When you file your tax return, a regular IRA withdrawal can affect the taxation of your Social Security benefits, but withdrawals from a Roth IRA won’t, as you have already paid the taxes.
You also need to take the timing of making your Roth IRA conversions into consideration. Contributing to a Roth at 63 or older, especially if you plan on going on Medicare at 65, could subject you to the “Income Related Monthly Adjustment Amount (IRMAA).” Your Medicare Part B and D premiums are determined by your tax return from two years prior, as it takes almost two years for Social Security to receive your tax return. If your modified adjusted gross income (MAGI) – AGI plus non-taxable interest and 50% of your Social Security benefits – is more than the set income levels in the year you turn 65, you will pay a higher premium. The higher premium will last 12 months unless you have a life-changing event. View what is considered a life-changing event here …. to see if you qualify for getting the higher premium lowered. A Roth conversion is not one of them, even though you may not be able to start your withdrawals yet.
The following article, written by Rudri Patel, highlights the key differences between a Roth IRA and a regular IRA. Read the full article here …..
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AMAC Foundation Social Security Advisors are not financial advisors. If you have questions on IRMAA, please call us at (888)750-2622 or email us at ssadvisor@amacfoundation.org