Say hello to my new friend Roth!

From time to time it is very important for an investor to take a step back and analyze his progress. Sometimes the result is that the current strategy is good just the way it is. Although sometimes the investor realizes that there are changes that he can make to his investing strategy to make better use of his cash. Recently upon some reflection I decided that I needed to make some changes to my investing strategy, thus I would like to introduce my new friend Roth!

Currently I decided to open myself a Roth IRA. I came to this decision because of several factors that I will explain below…..

    1. A Roth IRA offers more flexibility with it, than does a traditional IRA. I can withdraw my contributions from the account early without penalty, while the same can not be said for a traditional IRA.
    2. The contributions that go into the Roth IRA are done with after tax dollars. This works better for me currently because I have an AGI ( Adjusted Gross Income ) that puts me into the lower tax brackets. Now if I were in an upper tax bracket it would make more since to use a traditional IRA so that it would lower my AGI to put me into a lower tax bracket.
    3. Because of the lower tax bracket, I had previously chosen to have money put into a Roth 401(k) at work. If I decide in the future to pursue a job with a different company, I feel that it will be advantageous to already have a Roth IRA setup to roll the money over into.

These are just some of the main reasons that I have chosen to make these changes to my strategy. Moving forward I don’t know if I will be maxing out the contribution limits of $5,500 but I will use the tax shelter to my benefit as much as possible.

One benefit that I really want to start using is having all my REIT positions held inside of my Roth IRA. Which is why I recently decided to sell my position in Realty Income Corp that I held in my Individual Account. I haven’t reopened a position yet but I will once I feel that I can buy in at a good price. This will be my only stock that I will have to reposition because of my new friend Roth.

I wish I would have opened the Roth sooner but I am building my game plan as I go. I am looking forward to spending many more years with my new friend Roth.

Please leave me any comments on this articles!

  1. Kailee | Reply

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