3 ways the downturn could help you build tax-free retirement savings

Plummeting markets are making Roth IRAs more attractive, although not everyone can put money into these retirement accounts.

Workers can save after-tax dollars in these individual retirement accounts, have them grow tax-free and then tap them free of taxes in retirement.

Two events make Roths an even better deal today: First, falling stock prices mean you can buy more shares of stock or mutual funds at lower prices.

Second, individual income tax rates are low, thanks to the Tax Cuts and Jobs Act. This reduces the tax cost of contributing to the Roth IRA.

But there’s a catch. This account isn’t available to everyone.

For instance, singles with more than $124,000 in modified adjusted gross income ($196,000 for married filing jointly) in 2020 cannot contribute up to the limit — $6,000, plus $1,000 if over age 50…Read more>>

Source:-cnbc

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