Page 102 - Charles Calhoun Book Rich As You Want To Be

This is a great, great invention, particularly for

young people. It is also beneficial to all people.

What it features is that you can contribute to your
IRA account, but you can designate it to be a Roth

IRA. With a Roth IRA, you give up the tax

deductibility of your contributions, but at the end
of your career, all the income that this account

produces is tax-free! That offers tremendous,

tremendous benefits. It’s a great, great investment
vehicle. I wish they had it when I was a young

person. You should definitely take advantage of it

because it is available to you today. But let’s give
you a couple of examples to show how it works.

And keep in mind that most of your portfolio,

perhaps 90% will be growth which would mean
avoiding taxes on 90% of your portfolio.

Suppose for example a person was to
contribute $4,000 per year to a Roth IRA starting

at age twenty. And they do that for just five years,

and then they stop and never add another penny
to it. If we assume a return of 12 percent, they

would have accumulated about $27,000 after five

years. And then just by letting thirty-five years
pass and never touching that money or adding to

it, at age sixty, after a total of forty years, that
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