Personal Finance

Nest egg advice: Location, location, location

Do you know 'where' you should put your savings?

We all know it's important to save for retirement. But exactly where you invest that money may be just as important.

What type of account should you set up for your retirement dollars? Taxable or non-taxable? Traditional or Roth IRA?

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Mark Mercuri asked me this question on Facebook:

"Would a Roth IRA be more beneficial than a traditional IRA in your 40s and 50s?"

In your 40s and 50s, you're still young. It's possible that you're going to live until 90. A Roth IRA gives you the opportunity to grow your retirement savings tax-free.

Unlike a traditional IRA, you won't get an immediate tax break with a Roth, since you're investing after-tax dollars. But earnings grow tax-free and, generally, you won't have to pay taxes on the money that you take out after age 59 1/2, as long as you've held the account for five years.

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Still it's always important to compare your current income tax rate to your projected income tax rate in retirement. Choose the type of IRA that's most suitable for your future tax and financial profile.

If you have retirement questions, email me at or tweet me at @sharon_epperson and use the #GetAPlan hashtag.