Published by Taylor Financial Group (for women)
You know that feeling you get when you see a beautiful pair of shoes and then find out they’re on sale? Yeah, well I get that exact same feeling when I max out my Roth IRA (okay maybe it’s less exciting, but it’s much more rewarding!). I encourage all women planning for retirement to focus on a Roth IRA. No matter your age, it’s never too early (or too late!) to save for retirement, and a Roth IRA is a great way to do that. Consider these steps to help you get ahead in your retirement planning.
Open a Roth IRA Account
If you don’t already have one, the first step you should take is to open a Roth IRA account. If you do have one, then great! You’re one step ahead. The advantage of a Roth IRA versus a traditional IRA comes down to taxes. In either type of account, you are able to set aside up to $5,500 a year ($6,500 if you are age 50 or over). But, with a Roth IRA, you pay taxes upfront at the time of deposit, and then your earnings and withdrawals are tax free after age 59 ½. Setting up an account is simple! Give us a call and we will guide you through the process.
Envision Your Future
Your next step? While retirement may seem like a lifetime away, I promise it will slowly creep up on you. Since you probably don’t want to work forever, you should try saving the maximum each year in a Roth IRA. It can be difficult at times to prioritize distant goals, but dedicating yourself to maxing out your Roth IRA each year will have you thanking yourself when it comes time to retire. If you invest $5,500 per year for ten years, that could turn into $72,494.37 that you’ll be able to withdraw in retirement.
Don’t Be Over the Top with Your Goals!
Make sure your goals are manageable and attainable. This way you can start making regular contributions without feeling stretched or going beyond your means. I don’t know about you, but the thought of contributing $5,500 at one time stresses me out. Breaking it down will help you see the goal through. Think of it like this: $15.07/day, $105.77/week, or $458.55/month. Set yourself a reminder for the end of each month to set aside that money and contribute it to your Roth IRA account, or better yet, set your account up on autopay so the money automatically comes out!
Know Your Limits and Don’t Give Up
Knowing your personal limits is the most important step you can take (aside from the first step – opening an account). It’s not the end of the world if you’re not able to max out your Roth IRA this year (especially if you have high-interest debt or don’t have enough money to cover your monthly expenses). But, remember that even a few hundred bucks can turn into thousands of dollars over a decade or two. Contribute what you can and try to increase that amount over time!
Don’t get stressed out about retirement planning. Give us a call so that we can help you get on the right path to a happy retirement.
Sources:
NY Times, Here’s How to Max Out Your Roth IRA in 2018, February 2018