What are the disadvantageous in investing in the Roth IRA?

Question

What are the disadvantageous in investing in the Roth IRA?

Answer 1

I am not certain that the disadvantage that Jeff mentioned is a disadvantage.  It appears to me to be an advantage.  If people are penalized for extracting their money from the account, they are less likely to do so.  And by the time they are ready to pull some of the money out, if they invested wisely they will find that it will be difficult to pull the money out faster than it accumulates.  To me that is an advantage, not a disadvantage.

Answer 2

Congress might go to means testing and actually tax it if you make over a certain amount of money.

When times get tough, the government turns to taxing the citizens more.

Look what they did with the retirement programs many people got from companies, retirement proceeds use to be tax free. Now the government is taxing them.

Answer 3

Loss of control of your money, i.e. you have to leave it in until 59 1/2 or pay a penalty and can't use it as collateral.  

If you make money on gains, you don't get the capital gains treatment because the IRA isn't taxed.  All withdrawals are considered regular income.

Answer 4

In a ROTH IRA you can withdraw regular contributions without penalty.  This differs from a Traditional IRA.  You would pay a penalty on any gains that you withdraw.

So there really isn't a disadvantage to the ROTH.

Answer 5

Only one.  You can't pull the money out until you're 59 1/2.

Other than that, it's the best investment plan Congress ever invented.

You put money in, and it's exempt from capital gains taxes.