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CNN Saturday Morning News
Roth IRAs May Be Best Way to Save For Retirement
Aired October 12, 2002 - 08:44 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Well, with Wall Street on such a wild ride these days, investors are wondering how to build and protect their retirement plans.
Clark Howard has some answers.
But the last time he was here one of our viewers had questions about Clark's explanation of a Roth IRA. So in this week's Pocketbook Protector, Clark brings you Roth IRA 101.
(BEGIN VIDEOTAPE)
CLARK HOWARD, CONSUMER ADVOCATE: Ron in Florida has a statement for me about something that I had said on a previous morning about Roth IRAs. Ron feels I was very misleading. I was wrong in how I explained something called a Roth IRA. A Roth IRA is a special kind of savings account that you can open for retirement that is my all time favorite. With a Roth IRA, what you're allowed to do is take up to $3,000 of cash, this is after tax cash, money that you have after you get your paycheck, and over the course of the year, you're allowed to put it in this special account called a Roth that you can open at any mutual fund company or stock brokerage house. And the money, once it's in a Roth, is not subject to tax. And if it's held till retirement age, is never taxed.
Now, in terms of what Ron's unhappy with me about, Ron feels I didn't explain thoroughly that it's your after tax money that goes into a Roth. But the tradeoff is by putting your money in there, everything you could earn over the next 10, 20, 30, 40 years is yours tax-free. And it is a fantastic thing to do. Roths are the best deal that we've ever gotten from Washington. And there's extra flexibility with Roths that even if you need some of the money for family expenses, an emergency or a child's college or anything like that, before age 59 1/2, when you're free and clear to take all of the money, you can take out all the money at any time for any reason that you contributed to the account with no penalty and no tax as long as you leave your earnings in the account.
But the real purpose of a Roth is the greatest way ever to save for retirement. I don't want you to touch the money, but if you had to touch it, you can. And if you're not doing a Roth, I want you to get into this game because they are fantastic.
(END VIDEOTAPE)
LIN: Clark is on the mend from back surgery, though, but plans on visiting us again live as soon as he can, perhaps even next weekend. So start thinking up your questions now.
And, Clark, we want you to get well.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired October 12, 2002 - 08:44 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Well, with Wall Street on such a wild ride these days, investors are wondering how to build and protect their retirement plans.
Clark Howard has some answers.
But the last time he was here one of our viewers had questions about Clark's explanation of a Roth IRA. So in this week's Pocketbook Protector, Clark brings you Roth IRA 101.
(BEGIN VIDEOTAPE)
CLARK HOWARD, CONSUMER ADVOCATE: Ron in Florida has a statement for me about something that I had said on a previous morning about Roth IRAs. Ron feels I was very misleading. I was wrong in how I explained something called a Roth IRA. A Roth IRA is a special kind of savings account that you can open for retirement that is my all time favorite. With a Roth IRA, what you're allowed to do is take up to $3,000 of cash, this is after tax cash, money that you have after you get your paycheck, and over the course of the year, you're allowed to put it in this special account called a Roth that you can open at any mutual fund company or stock brokerage house. And the money, once it's in a Roth, is not subject to tax. And if it's held till retirement age, is never taxed.
Now, in terms of what Ron's unhappy with me about, Ron feels I didn't explain thoroughly that it's your after tax money that goes into a Roth. But the tradeoff is by putting your money in there, everything you could earn over the next 10, 20, 30, 40 years is yours tax-free. And it is a fantastic thing to do. Roths are the best deal that we've ever gotten from Washington. And there's extra flexibility with Roths that even if you need some of the money for family expenses, an emergency or a child's college or anything like that, before age 59 1/2, when you're free and clear to take all of the money, you can take out all the money at any time for any reason that you contributed to the account with no penalty and no tax as long as you leave your earnings in the account.
But the real purpose of a Roth is the greatest way ever to save for retirement. I don't want you to touch the money, but if you had to touch it, you can. And if you're not doing a Roth, I want you to get into this game because they are fantastic.
(END VIDEOTAPE)
LIN: Clark is on the mend from back surgery, though, but plans on visiting us again live as soon as he can, perhaps even next weekend. So start thinking up your questions now.
And, Clark, we want you to get well.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
