The Roth IRA
We are big fans of the Roth IRA. It’s possibly the greatest thing to ever come out of congress. The Taxpayer Relief Act of 1997 was primarily sponsored by Senator William Roth of Delaware. A Roth IRA is different than a traditional IRA. With a traditional IRA (individual retirement arrangement) the contributions made are tax-deductible up to $6000 annually ($7000 if you’re age 50 or older) so long as you had at least that much in taxable income. With a Roth, the contributions are not tax deductible—so you’d contribute all your money to a Roth after taxes—but the money grows and withdrawals are tax free. I like tax-free better than tax-deferred, so a Roth is mathematically the better deal in the long run if you think you’re going to make more money in the future and if you think your tax rates will be higher AND if you value not having to worry about taking a big tax hit on a large withdrawal from you account.
If you’re a high income earner however, you may not be able to contribute to a Roth IRA. In 2021 if your modified adjusted gross income (married filing jointly) is more than 207,999 then you’re left out of making a contribution to your Roth.
Even if you’re outside of those boundaries it’s worth looking into Roth IRAs very deeply, because there are ways to save into one even if you cannot make a normal contribution to one.
There’s a huge advantage to having a bucket of “tax-free” money at retirement that goes much further than the present value calculations you can make on your BA II Plus.
Since the Roth IRA is basically a “new riff” on a Traditional IRA we thought it would be terribly clever to also talk about making some traditional bourbon and rye cocktails with some New Riff spirits. Check out the recipe for the New Fashioned below.
- 2 OZ NEW RIFF BOURBON
- 1/2OZ DEMERARA SIMPLE SYRUP (1/2 CUP SUGAR IN THE RAW, 1/2 CUP WATER- BRING TO A BOIL, REDUCE TO SIMMER FOR 1 MINUTE. REMOVE FROM HEAT AND COOL.)
- 2 DASHES ORANGE BITTERS
- ORANGE PEEL
- LUXARDO CHERRY
- ADD NEW RIFF BOURBON, DEMERARA, BITTERS AND ICE INTO A MIXING GLASS.
- STIR, THEN STRAIN INTO A ROCKS GLASS WITH ICE.
- GARNISH WITH AN ORANGE PEEL AND A LUXARDO CHERRY.