Start Investing in a Roth IRA

There are a million ways you can invest your money. And quite frankly, they’re not all created equal. Each investment is designed to meet different objectives and has different benefits. But to put it simply, a Roth IRA is the Cadillac.

What is it?

A Roth IRA (Individual Retirement Account) is a privately sponsored investment vehicle that offers some very lucrative benefits. Perhaps the biggest, is that the Government doesn’t tax any money that you withdraw from your account, as long as you are doing it according to the Roth IRA rules. Wow, talk about a tax break!

So when do you pay taxes on a Roth IRA?

The simple answer is, when the Government takes their normal taxes out of your paycheck. That’s it. Although there are some tax guidelines to be aware of, essentially once your money is in a Roth IRA, it can sit there for 10, 20, or 100 years, never to be touched by the IRS. If you’re tired of being taxed (like everybody with a heartbeat) this is HUGE!

There are several other reasons why people love Roth IRAs. Here are just a few reasons why:

• You can use it as an emergency fund
• Use up to $10,000 of your Roth IRA to buy a house
• You direct how you would like the money in your Roth IRA invested
• Earn compound interest
• You can invest in both 401K and Roth IRA at the same time
• Take advantage of a 401K or IRA rollover or conversion to Roth IRA

Like most investments, the earlier you start a Roth IRA, the better. In fact, it’s even more crucial with a Roth IRA, because you are only allowed to contribute a certain amount every year. So if you wait until next year, you essentially miss out on the contribution you could’ve made this year. Accordingly, It’s a good idea to figure out what the contribution limits are now, so that you can get going ASAP!

 The good news is that starting a Roth IRA is super easy. You can set one up in about 15 minutes without paying a cent. That’s right, although there are some companies that do require a minimum initial deposit, there are several discount brokers that don’t. Of course, if you invest nothing, you get nothing, if you invest a little, you get a little, and if you invest a lot, well…you get the picture. But if you can establish the discipline to make regular contributions, your Roth IRA will be an incredible cornerstone in your portfolio.