Is it better to put money in savings or a Roth IRA?

A savings account can be better for setting aside cash you know you’ll eventually need to spend. A Roth IRA, on the other hand, can be better for saving for retirement if you’d like to invest your money to earn higher returns and gain some tax benefits.

Should I use a Roth IRA as a savings account?

While you could use a Roth IRA as a savings account, that could be problematic if you need to make a withdrawal. Generally, the IRS expects you to wait until age 59 ½ to withdraw money from a Roth IRA. Withdrawing money before then could trigger tax penalties.

What is the downside of a Roth IRA?

The main downside of a Roth IRA is that not everyone can open and contribute to one. If your income is above the thresholds allowed by the IRS, you’d only be able to open a traditional IRA instead. It’s possible, however, to convert traditional IRA funds to a Roth IRA, though that can result in a tax bill at the time of the conversion.

Can I move money from savings to a Roth IRA?

You can link a savings account to a Roth IRA to transfer funds. If you’d like to move money from savings to your Roth account, you’d just log into your brokerage account and schedule the transfer. Keep in mind that Roth IRAs do have annual limits on how much you can contribute.

Are Roth IRAs Insured?

The FDIC insures Roth IRAs held at banks when those accounts are self-directed vs. a plan administrator being responsible for making investment decisions. The same FDIC insurance limits that apply to savings accounts apply to Roth IRAs.

How to Pay Less Taxes

Roth IRA vs. Savings Account

https://www.sofi.com/learn/content/roth-ira-vs-savings-account/

Saving is an important part of your financial health and building wealth, but it can be confusing to understand all the different vehicles out there. For instance, if you want to stash cash away for a good long while, should you open a Roth IRA or a savings account?A Roth Individual Retirement Account (IRA) offers […]

Guide to Rolling Over a 403(b) Into an IRA

https://www.sofi.com/learn/content/rollover-403b-to-ira/

If you have a 403(b) plan at work and you leave your employer, you could roll over some or all of your savings into an IRA. Rolling a 403(b) over to an IRA simply means moving money from one retirement account to another. You might consider a 403(b) rollover if you’d like to gain access […]

Guide to Rolling Over a Pension Into an IRA

https://www.sofi.com/learn/content/rolling-over-pension-into-ira/

If you have a defined-benefit pension plan, you could opt for a lump-sum distribution when you retire or roll the money over to an individual retirement account (IRA). Rolling pension benefits to an IRA is something you might consider if you don’t necessarily need the money right away for retirement and you want to maintain […]

REITs vs Real Estate Crowdfunding

https://www.sofi.com/learn/content/reits-vs-real-estate-crowdfunding/

As a type of alternative investment, real estate can add diversification to a portfolio and act as a hedge against inflation. Real estate investment trusts (REITs) and real estate crowdfunding offer two unique entry points to this alternative asset class. Both allow you to invest in real estate without being required to own property directly. […]

What Is a Required Minimum Distribution (RMD) for IRAs

https://www.sofi.com/learn/content/ira-required-minimum-distribution/

Individual retirement accounts (IRAs) are retirement savings accounts that offer certain tax-advantages. Some types of IRAs, including traditional and inherited Roth IRAs, are subject to required minimum distribution (RMD) rules. What is an RMD on an IRA? In simple terms, it’s a withdrawal you make from an RMD every year once you reach a certain […]

“How to Pay Less Taxes”

Roth IRA vs. Savings Account

Guide to Rolling Over a 403(b) Into an IRA

Guide to Rolling Over a Pension Into an IRA

REITs vs Real Estate Crowdfunding

What Is a Required Minimum Distribution (RMD) for IRAs

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