We have a lot of retirement saving options nowadays, but arguably none might be better than stashing dividend stocks inside a Roth IRA. In a sense, Roth IRAs are like Swiss bank accounts for regular folks. The difference, of course, is that they’re perfectly legitimate and sanctioned by the Feds. And unlike stashing cash offshore, you can get started with just a few hundred bucks. The question is, what are the best investments to keep inside a Roth IRA?
You could do worse than dividend stocks. Sure, interest is taxed at a higher rate. But given how low yields are right now, you’re not hiding that much money from the IRS. Plus, combining the tax-free advantage of Roth IRAs and the compounding wonder of dividend stocks is a powerful wealth-building formula! This year, the standard limit an individual can contribute to their Roth IRA is $5,500. So if I had a spare five grand or so lying around, here are three dividend stocks I would buy: The Coca-Cola Co (NYSE:KO), Enbridge Inc (NYSE:ENB) and Union Pacific Corporation (NYSE:UNP).
Source: Income Investors
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- 5 Exceptional Dividend Growth Stocks With Quality Financials
- 10 High-Yielding Dividend Aristocrats Not Afraid to Raise Their Dividends
- 8 Dividend Stocks With A Quick Payback
- 9 Dividend Stocks Ignoring The 4% Rule
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