From Yahoo Finance: 2025-05-24 10:01:00

Roth IRAs are a powerful retirement savings tool, offering tax-free growth and withdrawals. Many Americans fail to maximize their benefits by choosing conservative investments, which limit growth. Experts recommend using Roth IRAs for growth-oriented investments to fully utilize their tax-free advantages. Investing too conservatively can waste the Roth’s benefits. Another common mistake is fully funding a Roth IRA but not investing the money wisely, leading to missed growth opportunities. Avoiding Roth IRA conversions can result in higher taxes over time, while overdoing conversions can push individuals into higher tax brackets. Early withdrawals of earnings from Roth IRAs can incur taxes and penalties unless there is an exception. Financial planners can help balance savings buckets to prevent the need for early withdrawals.



Read more at Yahoo Finance: This is the No. 1 Mistake Americans Make With Their Roth IRAs