Impact of Traditional and Roth IRAs on Social Security Benefits

When comparing traditional and Roth IRAs, you will need to consider many different things. One overlooked area is how they affect your Social Security benefits. Here are a few things to consider about the impact of traditional and Roth IRAs on Social Security benefits.

Impact

These accounts have different affects on the amount of money that you will be able to keep from your Social Security benefits. Once your income with the Social Security benefits gets up to a certain point, you will have to start paying taxes on the benefits that you receive. This makes it important to make sure that you understand which type of retirement account will most affect your Social Security benefits.

Which Is Best

With a traditional IRA, you will be taking withdrawals of money that add to your taxable income. When you add your Social Security benefits to this number, there is a good chance that you will be over the minimum threshold that the IRS set up to determine when someone has to pay taxes on Social Security benefits. With a Roth IRA, this will not be an issue. All of the money that you receive is tax-free, and it will not affect the taxes you pay on your Social Security benefits.

blog comments powered by Disqus