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Ask the Retirement Expert: Can Money That I Have Put in a Roth Account Ever Be Taxed Again?

Angela DiCastri, MBA, CLU® •  May 13, 2016 | Your Finances, Enjoying Retirement, Ask the Expert

By Angela DiCastri, MBA, CLU®

Angela is the Director, Retirement Market, Planning and Sales. Under her leadership, the department is responsible for the growth and development of the retirement market, sales and adoption strategies, and the execution of plans that align with both the markets needs and the Company’s product development efforts.

Each week our Northwestern Mutual retirement experts answer your questions. This week’s question:

Can money that I have put in a Roth account ever be taxed again?

It would require a change to the law—and likely an incredibly unpopular one. The beauty of a Roth is that while you put in after-tax money today, you’ll never pay tax on that money or its growth in the future as long as you meet the requirements for taking a distribution. And if you don’t spend the money, your heirs won’t pay tax, either, when they inherit the account (although they will have to start taking money out of it).

Traditional IRAs and 401(k)s allow you to save money without paying tax today. That money will grow tax free, but when you take money out in retirement, you’ll pay tax on those distributions.

That means that if taxes ever do go up, you’ll pay more in the future. With a Roth, you know what you’ll pay today, and you don’t have to worry about what happens to tax rates years from now.

Do you have a question for our Northwestern Mutual retirement experts? Click here to send your questions.

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