Investment & Retirement Account Research Paper Example | Topics and Well Written Essays - 500 words

Investment & Retirement Account - Research Paper Example Bonds are usually risk free and they are the best investment for retirement purposes. That will ensure that an investor gets assured returns at the end of the year. The use of options is highly risky. However, if the gains are positive, the returns will be high. The other advantage of options is the fact that the returns are usually frequent. In the case of a person wanting to retire, he/she will be assuring of frequent returns that will be used for survival purposes. Stocks are advantageous because they are a source of accumulating wealth and frequent dividends. The difference between traditional IRA’s and Roth is mainly on the payment of taxes for the deposits. In the case of the traditional IRA, taxes are paid at the end when a person is withdrawing the retirement money. There are some instances when a person can escape taxes in the front end in a case whereby money is put in the account. In the case off Roth IRA, it is the opposite of that. Taxes are usually paid in the front end and there are no extra taxes at the back end. For both accounts, money usually grows tax free while in the account. The other difference is on the contribution differences. For traditional IRA, anyone who has an earned income can contribute. However, for Roth IRA, there are income limits