Phil Cannella – Phillip Cannella Media: Phil Cannella is well versed in IRA regulations and the laws imposed by the IRS relating to retirement accounts and their tax favored status. Most people are well aware that a traditional IRA lets you grow your money on a tax-deferred basis which means that you don’t have to pay taxes on the monies you put into the IRA nor on its growth as long as the money sits in the IRA. As Phil Cannella explains, once you start taking distributions you will pay taxes on the amounts withdrawn.
Phil Cannella goes on to explain that while it is widely understood that most people will be in a lower tax bracket when they retire and so will be paying less in taxes than if they were to pay the taxes now, which is not necessarily correct. This is where Phil Cannella differs from your run-of-the-mill advisor who is not as knowledgeable in regulations governing IRAs.
Phil Cannella explains that a Roth IRA on the other hand also has tax-favored status with the IRS but the money contributed is contributed after taxes are paid and the growth is tax free, hence no RMDs will ever be needed. The benefit of this as Phil Cannella explains is that taxes are most likely going to go up over the next 20 years and when the tax brackets are higher the benefits of tax-deferral with be lesser and you well could be better off paying the taxes now and enjoying tax-free growth.