Eliza is a 60-year old woman who has been in the workforce for many years. She has made many investments over time as part of her retirement planning. But until now, she has no IRA. Eliza would like to add an IRA to her retirement portfolio. She can make contributions during her remaining 8 working years, but would like to maintain low-risk investments. At this stage of her career, Eliza is in a relatively high tax bracket, but she expects to drop to a lower tax bracket when she retires. At this point, which type of IRA would be best for Eliza, a Traditional or Roth IRA. Explain your reasoning using complete sentences.

Question
Answer:
Traditional IRA is meant for anyone younger than 70 years with earned income for contribution. However, the Roth IRA does not have restriction of age but have restriction of income eligibility. Therefore, it is wise for Eliza to choose the Traditional IRA for it has no restriction on income eligibility.





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general 6 months ago 5948