Few things are more boring than investing for retirement.
You're taking money that you could spend today, and putting it into an account that you can't touch for 30+ years..
🥱😴
However.. it's a necessity.
Unless you plan on working forever, you'll have to invest at least a little bit of money throughout your life.
Now, there are so many different kinds of investment accounts out there which is why today, we're only focusing on one of them:
The Roth IRA
Why the Roth?
Because it's one of the easiest accounts to open and it's also one of the most impactful.
A Roth IRA lets you invest money that has already been taxed and once you reach age 59 1/2, you can have that money completely tax free.
For example: If you put in $500 to a Roth IRA today and it grew to $1 million, you could withdraw that entire $1 million and not have to pay taxes on any of it.
Pretty cool, right?
Okay.. maybe it's not "cool", but it's impactful.
Here's an example of investing $6,000/year (assuming 8% returns), and growing into almost $300,000, completely tax-free:
If you haven't opened a Roth IRA yet, these are a few places I recommend:
Fees: $0, individual investment fees vary
Account minimums: $0
Where to open: investor.vanguard.com/ira
Fees: $0, individual investment fees vary
Account minimums: $0
Where to open: fidelity.com/retirement-ira/overview
Fees: $0 per trade, individual investment fees vary
Account minimums: $0
Where to open: tdameritrade.com/account-types/retirement
Fees: $1-9/month
Account minimums: $0
Where to open: ellevest.com/investing
Fees: .25% AUM (read more about investment fees)
Account minimums: $0
Where to open: betterment.com/ira-and-401k/
• Annual contribution limits for a Roth IRA: $6,000 ($6,500 in 2023)
• Income limits for contributing to a Roth IRA: $140,000 for singles and $208,000 for married filing jointly
• It is possible to contribute to a Roth if your income is over these limits through the "backdoor" Roth IRA strategy
• You can withdraw contributions at any time penalty & tax-free because that money has already been taxed (like a savings account)
Also read: How to Open a Roth IRA
