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Roth IRA vs. brokerage account: What's the difference?

The article from OregonLive discusses the differences between a Roth IRA and a brokerage account, focusing on their tax implications, contribution limits, and investment options. A Roth IRA offers tax-free growth and withdrawals in retirement, with contributions made with after-tax dollars, but it has strict annual contribution limits ($6,500 in 2023, or $7,500 if you're 50 or older) and income restrictions. Withdrawals can be made tax-free after age 59½, provided the account has been open for at least five years. Conversely, a brokerage account provides no tax advantages; you invest with after-tax money, and any gains are subject to capital gains tax upon sale. However, there are no limits on contributions or income, offering greater flexibility in terms of investment amounts and types. Brokerage accounts are ideal for those looking to invest beyond the limits of retirement accounts or for goals other than retirement, like saving for a down payment on a house or funding education. The choice between the two depends on one's financial goals, tax situation, and investment horizon.

Read the Full Oregonian Article at:
[ https://www.oregonlive.com/business/2025/01/roth-ira-vs-brokerage-account-whats-the-difference.html ]