IRA Rules

Question: Should I open a Roth IRA or put it into a savings account?

My mom recently retired and is currently getting Social Security. Much of her other savings has dried up and she was forced to cash in her IRA account from her job and she has given the money to me. Someone told her that she cannot put it into her own account because of some rule with Social Security. I want to put at least $2,000 into a Roth IRA, but I am currently trying to find another job. All I know is that a Roth IRA doesn’t require you to pay taxes on it, but I don’t know how much I would have to contribute to it. Seeing that I don’t have any employment options open to me now, should I still try to open an Roth IRA account or try to make that money grow by placing it into a savings account?

Answer: Also – a ROTH does not allow you to deduct the IRA amount off your taxes when you make the deposit.

On the other hand, when you cash it in, you dont pay the taxes then -

Ie – Dont pay taxes on the $2,000 now, and in 20 years pay the taxes on the Matured $50,000 (Traditional)

OR

Pay the taxes on the $2,000 and in 20 years get the $50,000 tax free. (Roth)

Money Management : Rules for Contributing to an IRA

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