7 Things to Know About Roth IRAs

iraRoth IRAs or individual retirement accounts are NOT scary and even though I don’t know anything about you, I know you need one. Really you do. Here are 7 Roth IRA tidbits to help bring you up to speed so you can start making your money work for you.

1. Roth IRAs are essentially savings accounts where you can deposit your cash to get a better return than your mattress is giving you.

2. Anyone of any age can open an IRA at their local bank or online at places like Vanguard, TD Ameritrade or Fidelity.

3. Don’t let the lingo scare you. Once you open the account and put in a few hard earned buckaroos you have officially “funded” your account or made a contribution”.

4. After funding the account you get to choose which investments you want your cash “contribution” put in.

5. Roth IRAs let you stash up to $5,000 a year. That’s less than $100 a week, not an impossible commitment. Think about it as a second girlfriend.

6. With Roth IRAs you can withdraw your contributions no questions asked, whenever you want, completely tax-free.

7. Roth IRA earnings on contributions can be withdrawn without owing any taxes if you’re over 59 ½.  That means Uncle Sam isn’t ever getting a dime of your investment returns if you play your cards right.

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  1. […] a Traditional, the contributions for a Roth IRA are not tax deductible. So, in the example above, you’d pay tax on the full $60,000 of income. […]

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