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Rethinking Roth Accounts: A Retiree’s Perspective at 72
Explore the advantages of Roth accounts from a retiree’s viewpoint at 72. Discover strategies for tax-free growth, withdrawal flexibility, and how to optimize your retirement savings for a secure financial future.
Investing in a Roth Account at 72: A Unique Perspective
At 72, Janice Campbell may not fit the typical profile of a Roth account investor. These investment vehicles, funded with after-tax dollars rather than the pre-tax contributions common in most individual retirement accounts (IRAs) and 401(k) plans, are generally recommended for younger individuals embarking on their careers.
The appeal of a Roth account lies in its tax structure: contributions are made with money that has already been taxed, allowing for tax-free growth and withdrawals in retirement. For those in the early stages of their careers, this is particularly advantageous, as they can pay taxes at a lower rate than they might face in 20 or 30 years when their incomes likely increase. However, Ms. Campbell, a retired tech worker who remains active and healthy, has a different outlook.
Living in Arizona, she enjoys hiking and exploring the outdoors, but she is acutely aware of the potential for health issues as she ages. With the rising costs of long-term care weighing on her mind, she expressed her desire to avoid placing financial burdens on her children or grandchildren. “I think it’s important at our age not to put the burden on our children or grandchildren,” Ms. Campbell remarked.
On the advice of her financial adviser, Ms. Campbell has recently decided to adjust her investment strategy by converting a portion of her retirement savings into a Roth IRA. “Chances are, I won’t need that money until later, and it can just grow,” she shared, highlighting her long-term perspective and financial planning.
Financial advisors like Andrea Clark, who assists Ms. Campbell, advocate for the benefits of contributing to or converting funds into a Roth account for older workers and retirees. Ms. Clark, the owner and founder of Table Financial Planning in Fountain Hills, Arizona, emphasizes that a Roth account provides the flexibility of having a tax-free pool of funds available for emergencies or unexpected expenses. This strategy not only offers financial security but also peace of mind as clients navigate the complexities of aging and retirement.