From A Tax Perspective, A Roth IRA Can Be A Young Professional Investor’s Best Friend



By Adam Souply, CFA


The Roth IRA is an excellent retirement savings tool for young professionals. It provides benefits from a tax perspective and via compounding growth. With a Roth IRA, you can contribute up to $5,500 after-tax dollars for tax year 2018 (you still have until April 15th of 2019) and up to $6,000 for tax year 2019. Your investments have the ability to grow tax-free and be withdrawn tax-free after the age of 59 ½. Contributions made to a Roth IRA can be withdrawn anytime tax- and penalty-free.


The Roth IRA does have income limits. In 2018, if you earned more than $135,000 (single filer) or $199,000 (married joint filer), you are ineligible to contribute to a Roth IRA. For 2019, those limits are $137,000 (single filer) and $203,000 (married joint filer). There is a phase out for Roth IRA contributions too: 2018 and 2019. Even if your income level is above the maximum amounts, there is another solution via a backdoor Roth IRA.


From a tax perspective, most likely you are in a lower tax bracket than what you expect to be in the future. By contributing when you are in a lower tax bracket you are locking in a lower tax rate today with your contributions. On the other hand, if you contribute to a Traditional IRA (where you invest pre-tax dollars), withdrawals will be taxed presumably at a higher tax rate later in retirement.


To connect the idea of compounding, consider a hypothetical example of contributing $6,000 per year for 30 years and earning a 7% return. At the end of 30 years, you could have $566,765 in your retirement account. If your spouse establishes an account too, that could equate to over $1 million dollars!


There are other benefits of utilizing the Roth IRA. You are never required to withdraw money with a Roth IRA. A Traditional IRA, on the other hand, has a required minimum distribution that begins when you turn 70 ½. Also, when you reach age 50, you qualify to contribute an extra $1,000 in contributions, adding to the power of compounding.


Time is on your side; don’t waste it!


To find out if a Roth IRA is the right retirement vehicle for you, contact your DBR Next financial advisor at DBR & Co.




Adam Souply, CFA is a Financial Advisor and Managing Director of DBR Flagship Client Services, at DBR & Co., a Pittsburgh-based wealth management firm. If you would like to contact the author, Adam Souply, please e-mail him at or call 412-227-2800.




This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author.  D. B. Root does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources.  Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements.  As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security



Share on Facebook
Share on Twitter
Please reload

Subscribe to our monthly Big Picture Financial Planning newsletter


Please reload

Where to find us:



436 Seventh Avenue, Suite 2800

Pittsburgh, PA 15219-1818


Phone: 412.227.2800

Toll Free: 888.227.0913

Fax: 412.227.2805



811 Madison Ave, 7th Floor

Toledo, OH 43604


Phone: 419.574.9399

Toll Free: 888.227.0913

Fax: 419.574.9356

  • White LinkedIn Icon
  • White Facebook Icon
  • White Twitter Icon
  • YouTube - White Circle

© 2019 DBR & CO

This communication is strictly intended for individuals residing in the states of AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.

Important Consumer Disclosure: D.B. Root & Company, LLC (“DBR & CO”) is an SEC registered investment adviser located in Pittsburgh, Pennsylvania. DBR & CO and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC-registered investment advisors by those states in which D.B. Root & Company maintains clients. DBR & CO may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. DBR & CO’s web site is limited to the dissemination of general information regarding its investment advisory services to United States residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of DBR & CO’s web site on the Internet should not be construed by any consumer and/or prospective client as DBR & CO’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Furthermore, the information resulting from the use of tools or other information on this Internet site should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from DBR & CO. Any subsequent, direct communication by DBR & CO with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of DBR & CO, please contact the United States Securities and Exchange Commission on their web site at A copy of DBR & CO’s current written disclosure statement discussing DBR & CO’s business operations, services, and fees is available from DBR & CO upon written request. DBR & CO does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DBR & CO’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.

Advisory HQ’s Top Ten advisors’ rankings are based on methodologies used by established financial news organizations and are highly focused on three pillars: total assets under management (AUM), firm size/quality, and the amount of revenue generated by an advisory firm. AdvisoryHQ’s Advisor Selection Methodology is based on a wide range of filters including fiduciary duty, independence, transparency, level of customized service, history of innovation, fee structure, quality of services provided, team excellence, and wealth of experience. The review and ranking articles are always 100% independently researched and written without the ranked Firms knowing they are being reviewed.

Certain supervised persons of DBR & CO, in their individual capacities, as registered representatives of a broker-dealer, may provide securities brokerage services and implement securities transactions under a separate commission based arrangement and may be entitled to a portion of the brokerage commissions paid to the brokerage firm, as well as a share of any ongoing distribution or service (trail) fees from the sale of mutual funds. 


A number of DBR & CO’s Supervised Persons are also licensed insurance agents and may offer certain insurance products on a fully-disclosed commissionable basis.  A conflict of interest exists to the extent that DBR & CO recommends the purchase of insurance products where its Supervised Persons may be entitled to insurance commissions or other additional compensation.