We all want to have a “comfortable” retirement right? Why not start early? Most of my friends and family don’t have an account; several of them don’t even know what a Roth IRA is. It’s pretty shocking.
I recently started my account last month. One hundred dollars. That’s all it took. I named the amount and I put in just about as much money as I want. Contribution limits generally change annually. I believe the current limit is about $5000 per year. Edward Jones turned out to be very knowledgeable. There were no surprises. They were upfront, all of the facts and statistics and everything was on paper for me to view.
According to Edward Jones, my account is a 60/40 mix of stocks and bonds based on mutual funds. It is leaning towards a higher risk rate early on with stocks. It then shifts conservatively towards bonds as I get closer to retirement. This is essentially the best investment strategy for young adults today. I have $100 wired auto-bill style from my checking account to my Roth IRA account. Its like I’m paying a bill to myself. Any leftover discretional money I have, I contribute to my account too.
With that said, it is estimated that my mutual fund-based account should yield 7% monthly. My local banks only offered 3% per monthly. They didn’t even want me to know where my money would be invested.
There is one big advantage to having a Roth IRA, especially in your golden years. The money you put in is already taxed. Once you withdraw, its basically tax free. With a traditional Roth IRA, its usually taxed after withdrawing.
Above all, its not a bad idea for start building that nest egg. You might just be amazed at how much you can save.
To learn more about Roth IRAs: