- Each year you have the ability to contribute up to $5,000 to this account. ($6,000 if you are over 50 years old)
- You have the ability to contribute as little as $25 per month to the account. (I recommend setting up an automatic monthly contribution so you don't have to think about it.)
- The account is invested as you see fit (mutual funds, bonds, stocks, etc.)
- As the investments perform and interest accumulates, you do not pay taxes on the earnings.
- When it comes time to withdraw the funds in the account, you can access them tax free!! *1
- Bob is 30 years old
- He saves $100 a month
- He invests wisely and is able to attain a 10% average rate of return in his account
- At age 65, he has saved $42,000
- Since the account had been growing tax free at 10% the value at age 65 is now $357,752!
- Bob can withdraw the entire $357,752 from the account and will not have to pay any taxes
So what is this magic account? The Roth IRA.
Established by the Government and made available in 2008 to encourage individuals to take retirement savings into their own hands. By starting early, and contributing regularly, you will be one step closer to meeting your retirement goals. There are some income limitations*2, but if you are eligible, you should set up a Roth IRA today. For more information about the Roth IRA, contact Guide My Finances at Jackie@GuideMyFinances.com or by calling 619-861-8978.
*1 A qualified distribution is generally a distribution that is made after a 5 taxable year period of participation and that either is made on or after the date the employee attains age 59½, is made after the employee's death, or is attributable to the employee being disabled.
*2 Phaseout of Roth contribution eligibility:
Single: $105,000-$120,000 AGI
Joint: $166,000-$176,000 AGI
Established by the Government and made available in 2008 to encourage individuals to take retirement savings into their own hands. By starting early, and contributing regularly, you will be one step closer to meeting your retirement goals. There are some income limitations*2, but if you are eligible, you should set up a Roth IRA today. For more information about the Roth IRA, contact Guide My Finances at Jackie@GuideMyFinances.com or by calling 619-861-8978.
*1 A qualified distribution is generally a distribution that is made after a 5 taxable year period of participation and that either is made on or after the date the employee attains age 59½, is made after the employee's death, or is attributable to the employee being disabled.
*2 Phaseout of Roth contribution eligibility:
Single: $105,000-$120,000 AGI
Joint: $166,000-$176,000 AGI
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