Roth IRA question...

[JKeats]

greetings!

don't suppose anyone would know the answer to the following question...

does the interest one earns on a Roth IRA depend on the institution at which you open the account, or is it some standard ammount regardless of where you open the account.

i can't seem to find anything online that discusses this.

thanks for the help!

[DiverBob]

Within your Roth IRA, you can choose how the money is invested, much like a traditional IRA or a 401k. I would assume that the amount of freedom of choice depends on the financial institution. Using Fidelity, for instance, you can have a brokerage Roth IRA that offers a great deal of investment freedom. I'm sure the other major institutions offer similar plans. The bottom line is that the amount of interest or gain depends on how you or your broker choose to invest. The Roth part just means that you don't pay interest on distributions after age 59-1/2. Also, Roth IRA contributions are not deductible like a traditional IRA. Hope this helps.

[robnsue]

Excellent response Bob. In addition you can convert a traditional IRA to a roth (Which might be a good idea as undervalued as things are right now!).
The advantage would be that your roth distributions would be tax free at the time you take them.

[DUFFER]

You can do that even though a standard IRA may have given you a tax break?

[JKeats]

the roth is better than the ira most of the time because your earnings are tax free. although contributions to an ira are pre-tax, you still pay taxes on your earnings.... and since who knows how much you'll be taxed on those earnings in the future... especially if you ever plan on getting a raise and perhaps moving into a higher tax bracket, it's usually better to pay the tax now and keep your earnings tax free.

i think that's right... feel free to correct me of i'm wrong.

[filly]