I have to figure out if it’s a good idea to risk paying taxes now on funds that I will be stashing away for later, which I can enjoy “tax-free” at the time of withdrawal.  The big question is:  What if I don’t live long enough to take out and spend tax-free all the Roth IRA contributions I already paid taxes on?

All that means, before deciding about a Roth IRA, I have to think about issues such as the status of my health, my age, the projected number of years I’ll live during retirement, my current financial standing (such as if my doghouse is paid free and clear), and similar factors.

In other words, I must sit and howl at the moon about topics that aren’t necessarily fun for me, especially since I’m canine and probably won’t survive to a ripe ol’ human age.  I figure I will last a maximum of 20 human years.  What if I need only a half-decade’s worth of retirement funds, as opposed to humans, who sometimes require up to 4 decades’ worth.

Like I moaned, this isn’t a very tail-wagging topic for me, all this impending doom.  No wonder humans tend to put off estate and retirement planning!

So will the Roth IRA benefit me tax-wise?  Since I don’t anticipate a long human life, is it in my best interest to contribute to a Roth IRA now?

As I’m thinking hard about this question, The Boss’s mantra of Time Value of Money keeps ringing in my pricked-up ears.  I will be taxed on all my contributions now, but I may not be able to take advantage of the tax-free status of the withdrawals for very many years down the road. Money now in my doggy coat pocket is probably worth more than the same amount will be worth in the future because the money has potential earning capacity now.  If I don’t pay taxes on my contributions to an IRA now, I will feasibly be able to make the saved tax dollars work for me more now than in the future.

Although it’s true that I’m gambling a bit on a short retirement rather than a long one, it’s also true that it’s a calculated gamble, based on science.  I’m a dog.  I probably can’t take pleasure in tax-free retirement funds long-term, not like a human can.  So after listening to The Boss woof at me, I’m avoiding Uncle Roth’s IRA.

For you?  Your situation’s a bit different than mine.  But I would still sit and listen at attention to a tax professional before setting up a Roth IRA.  Give The Boss a call.  She can help you guide you through the decision-making process and answer your questions about financial concerns during your retirement years.