@@PenniesNotPerfectionwhen you say we can contribute with after tax money you mean every week s paycheck we can direct some of that money from our direct direct deposit account into our IRA?? Also we can withdraw some of our contributions if needed but not the earnings does the broker keep both amounts separate showing that on the account so we know which are one or the other??
This was extremely educational! I have a Roth IRA and had done some research on it, but I still learned a few things in this video, so thank you so much.
Whether to use a ROTH or just an IRA really depends on one factor. What is your current tax bracket, its all about taxes. If you are in a low bracket today like 12%, go with the ROTH. If you are in a high tax bracket 24% and higher, stay with a regular IRA and get the deduction now. You can't predict your tax bracket when you are old and using this money. You can only base your decision on what your current taxes are. If your tax situation changes, you can start contributing the other way. So have both accounts. 401K can take precedence if you have a match, you always want to take that.
Thanks for sharing! I find it impossible to predict what my tax bracket might be in 30-40 years so I do both pre-tax and after-tax investing for long term purposes.
I also find Roth accounts to be useful if retiring before Medicare kicks in. Roth withdrawals are not considered income when determining how much ACA insurance subsidies a person is eligible for. Depending on a person's withdrawal strategy, topping up with Roth $ could save you thousands in health insurance costs.
Hi Mary! I am so grateful I stumbled on your video. I don't leave comments as often as I should, but I just want to thank you for sharing this information. I've been putting this off for several years because of overwhelm, so it was extremely beneficial to hear you talk through that feeling. I love how personable you are & I truly felt like I was getting advice from an older sister who knows what I need to hear 😅 I am happy to say that I'm finally pushing past the uncertainties & setting myself up for success. I know I'm late to seeing this video, but you gained a subscriber & I can't wait to check out the other videos on your channel. Thanks again. 🙏🏻
This comment makes me soooo happy! I totally understand the uncertainty and wanting to put it off. That's what so many people do when getting started NOW/early is the best possible option. As your internet big sister, I just want to say I'm sooo proud of you!!
Thank you. I've listened to this the whole way to work. Will listen again. It's been 2 years I've been trying to figure this out. Definitely crunch time and like you said has been so overwhelming. I'm in a point in life I need to act NOW. This video makes sense for me
Great video I wish there was someone who made and much sense as you do when you talk about investing where I live. I'm going to have to research this here and see how to get on board. Thanks Mary, inspirational as always 💕
I'm in Ireland, but it's close enough 😂😂. I'm definitely going to start researching some investment opportunities here. I'm really interested in this. Also credit score too I'm going to find out what mine is now just to see.
This is second time watching. I just opened mine today because of you so thanks for that! I just need to listen on more time girl! I'm so new to this but I'm willing to learn.
thank you for your video. I just opened my vanguard ROTH IRA. I am still a little confused how it works but I just have $200 in there for now. I am hoping to add $100-$200 a month.
Great job! Vanguard is a wonderful company and it's owned by its users which makes it even cooler. If you consistently add and then invest in either an index fund or target date fund you dont have to worry too much about it.
Good content 👍 Good point to just get started with something you're comfortable with... You can always transfer account in the future. I would also say keep educating yourself. The more you know they more you will know what you will wanna do with the Roth IRA. I read several books about the Canadian version of this (TFSA) before I started and it helped me make better decisions.
Great video! I want to start a Roth IRA this year, I’m just debating on when. I do get an extra $600 a week from the CARES act, but so far I’ve been putting that all towards my student loans. In a few weeks I could pay off another loan doing this. I’m just not sure I want to put it off an another week to start my IRA. I’ll probably change my mind another 5 times before I do anything
Thank you for saying this! The majority of people never comment but a few have reached out and told me they opened Roth IRAs after this video and it's made me soo soo happy! It's such a great tool for people to save for the future!
You did such a good job explaining in this video! I have never totally understood what a Roth IRA is, even though I have one, lol, but I've never been able to max out my contributions. I just bought your Roth IRA tracker to help keep me on track with contributions. The video and tracker together will be really helpful, I think.
I've never left a comment on a UA-cam chanel. This is also the first $ i have ever watched. Thank you for making the info friendly to take in. I have loads of little questions. Can I have more then one Roth IRA account? Can I open one for my daughter? And so on. Thank you for makeing this simple and shame free!!!!
Thanks for watching! Great questions. You can have more than one Roth IRA but you are still limited to the contribution limit between all accounts. You can if she has an earned income. You can only contribute earned income so if she has a job or income source and files a tax return then yes! If not, then no. This followup video might answer some of your questions! ua-cam.com/video/UkPLPEsRmJI/v-deo.html
Okay, thank you so much! I will go watch the other video. I suspect that you have to pay taxes on it one way or another. Thank you for your advice and support
401(k) maximum contribution is *$19,500.* It may be better to max out your Roth IRA before you max out your 401(k) especially if you don't have an emergency fund.
Do you you have a Roth IRA? Do you love it as much as I do?! Learn more about Roth IRAs: penniesnotperfection.com/roth-ira-101/ Where to open a Roth IRA: ⭐ M1 Finance ➝ penniesnotperfection.com/M1Finance ⭐ Vanguard ➝ investor.vanguard.com/home ⭐ Fidelity ➝ www.fidelity.com/
This was awesome! I'm 58 and actually considering early retirement. I have 401k at work and just now trying to decide what to do with it when I stop working. Do I leave it right where it is or do I roll it over to an IRA, more specifically, Roth IRA? This video and all the information you shared will definitely help alot. Thank you!
I always roll over my 401ks so I control them. If it’s a regular 401k you have to roll it to a traditional Ira. You can then convert it to a Roth IRA but will have to pay the taxes to do so (consult a professional on that!).
I'm new to your channel and love how you explain things. Funny enough, this is a topic that has been on my mind lately, and need some guidance in rolling over money from one account/company into another one. How does one get in touch with you with help for unaddressed questions on the investing portion on money on the Roth IRA?
Yess! Do you have a 401k with your employer or another type? I love knowing these accounts are sitting in the background growing for me to provide in the future! 😀
If you can only put in 6k in the IRA annually, does this mean the amount you open with is a really meaningful starting point? Like you want to open with as much as possible? Or can your starting point only be 6k anyway as well? Thanks
Much needed video, thanks for making it! So, IRA is money invested that is not taxed yet vs Roth IRA is money, invested, that has already been taxed and will never be taxed again? Seems like a traditional IRA might be better because it might be better to be taxed upon withdrawal, later, like in retirement, because the taxes would be lower in retirement, or am I wrong? :-)
Hey so a few questions! So it’s not just about putting money in amd walking away? I have to pick something to invest or a target date as you said. But if it’s considered investing in then what happens is whatever you chose to invest in goes bankrupt or stock market crashes? Maybe I’m not understanding lol
Pennies Not Perfection lol now i see. So lets say I’ve been putting in for 3 years and company goes bankrupt do i only loose the money earned, what i put in only or both I feel like that is something that people aren’t talking about with Roth IRA.
Love it! Such a good investment opportunity for folks like me that aren't ever going to be bringing in those fat salaries. Took me an embarrassing amount of time to realize the 6,500(for 2023) is the MAX deposit you can make, not the minimum. You can open an account and invest with far, far less initial investment. Wish I'd opened up my Roth a decade ago!
Thank you so much, I know nothing about Roth IRA and you clarified it perfectly. I have one question, is there any possibility that I can lose the money I am originally contributing with. For example, I put 5,000$and with inflation or anything, I would find them 3,000$ Thank you again
Happy to help! If it’s invested there is always a level of risk that you can lose it. You have to weigh the risk of the investment you select against doing nothing with your money (which loses the value due to inflation if it’s just in cash). Hope that helps!
It depends on where you open it! Most traditional brokerages require $500 or $1000. Some of the roboadvisors online start at just $1. I left a couple links in the description or you can google based on how much you have available to start.
When I did it through my state job and another employer they didn’t need a specific deposit amount,, I just started with what I wanted and it automatically goes in with each check
So Roth IRA earns interest base on the performance of the investments you have in the account? Is a Roth IRA like active traded securities where you buy low and sale high to earn a profit? Or is it like a CD where you parked your money for an amount of time and then earn an interest once it has reach its maturity?
It’s just an account type. You pick what goes in it. Could be cash (earning nothing) or any other investment like stocks, mutual funds (earns returns). It’s up to you because yes it earns based on the performance of investments in that account.
Hi, @penniesnotperfection, I have a rollover from my job that hasn't been taxed yet. I put it in a traditional IRA but I am now interested in a Roth. My question is at what point can I get it taxed so I can put it in a Roth IRA? It hasn't been taxed yet
Oh gotcha, your question didn’t say that. If you are converting traditional contributions to Roth you will have to pay taxes the year you convert it. The amount you choose to convert (you don’t have to convert the entire account) will be taxed as ordinary income in the year you convert. So you’ll need to have enough cash saved to pay the taxes on the amount you convert.
@@PenniesNotPerfection thank you so much. I understand what you mean regarding consulting a tax professional. I appreciate the information you have provided.
The risk is based in what you choose as your investments. Roth IRA is just a type of account. You could choose to just let it sit in cash (not recommended) or you can choose lower risk investments instead of the stock market. It’s up to you! 401k is only high risk if you invest in something risky or have a bad plan at your company. But the risk of not investing is much higher because you will be losing out to inflation.
Thank you for the great advice! My current employer does not offer a match 401k. I already have a ROTH IRA account with Franklin Templeton. I also have a qdro 401 k. Should I transfer the qdro to the ROTH IRA and not the 401 k with my current employer?
I’m 23 in law school, so I don’t have a job aside from summer internships (that sometimes pay). I have some money saved up and have been hearing a lot about Roth IRAs. Can I open one with no income? & Just put all my savings in there? And also- You mentioned how I can pull out my contribution at any time. But I can only pull out the total contribution + earnings when I reach retirement age? Thanks so much!
You have to have earned income for the year to contribute. Saved money is not the same. Correct on earnings at retirement age. You can do it before but will be subject to penalties and such which will eat into the returns.
When you add money you then pick something to invest in, like a S&P 500 fund or whatever you select. Most brokerages have an option for you to get help from someone there for free or have a selected investment plan that’s moderate or aggressive. I can’t recommend investments and it depends on where you opened one but don’t be scared to put money in!
I have no idea about any of this...can you lead me to a video that explains just general terminology? When you start talking about picking...I get lost at what you are talking about. I have ACORN but have never started an account
I am a college student who will be graduating with a fair amount of debt. Right now I could only probably put $30ish a month into a ROTH, is it worth it to start like that?
Anything you invest will grow over time, even small amounts. I started in college and I'm glad I did. You can't go back and invest for years you missed. I can't advise on your specific situation without details but that was my experience.
What if my regular gross income is around 100,000/year but since I do a lot of overtime my gross income exceeds >140,0000, am I still eligible to open Roth IRA? Does it stop taking contributions when I reach the maximum per year as individual?
Like why are we investing in stocks in all that in our roth iraa accounts? Like we can do that in our regular brokerage account. Like is their a difference in doing that in the roth account then a brokerage account?
In your Roth you are doing it tax free on the gains. In a brokerage account you are going to pay capital gains taxes which depending on how long you hold something can be substantial.
The risk is based in what you choose as your investments. Roth IRA is just a type of account. You could choose to just let it sit in cash (not recommended) or you can choose lower risk investments instead of the stock market. It’s up to you!
I just opened a RothIRA savings at my credit union. Is it better for me to max it asap or slowly over the year as far as the interest that i am earning off of it. Mine is yearly with the highest interest rate to earn. and it's rothira savings different than an investment one where you use stock, gold, real estate... Im not sure of the difference or if there is a difference.
I opened a roth IRA in Charles and schwab but do not Know nothing about it for exempla I'm confused on this + $5,200 .80 ( 26,284.60%) 2- year change, what it means?
It's been years since I had one of these and truthfully I regret not keeping my Roth IRA and continuing with it , how much do I need to contribute and continue to contribute to open on ?
Where I can invest like ROTH IRA is already passed the limit and second question what happens if I’m under the limit contribución and the next year I pass it.
Do I have to max out my Roth IRA every year? Or can I just max it the 1st year and let it sit there till retirement? will it grow by itself or do I have to pick where I invest the money so it can grow? Will I get penalized if I can’t max it out? Does it have to be paycheck money/direct deposit or can I use my savings account money to invest?
I have a question. I thought a roth iraa you just put money in it and let it sit and grow. Why do you buy stocks and things like that in your roth iraa? Like if you put a a lot of money in the iraa and you buy a stock in it crash you losing all your money in the iraa
Money doesn't just sit and grow if it is not invested in anything. If you put it in a Roth IRA it will just be in cash until you pick investement. Cash does not grow and because of inflation will lose value.
I do! I love their funds and the business model. But I do recommend Fidelity as well because it has many of the same features but a better user experience on the site/app and easy to do fractional shares, and a few other pluses. I also recommend M1 Finance because it's my favorite investing app currently and they also offer Roth IRAs.
Can we open up Roth IRA’s for our young children. I know we will have to contribute for them, but just wondering 😅 sorry if that is a stupid question 😬
You have to have earned income for a Roth IRA so they would need a tax return for any money put into one. People do them for kids when they pay them for work done in businesses or earned other ways. I'm not an advisor though so definitely double check with a tax professional!
If you are only able to contribute a small amount per year is it worth it to open a Roth IRA? I max out my employer match on my 401K, but I’m looking for other ways to save for retirement, but still pay off debt.
Well it depends on a lot of factors like your tax rate now and what you expect it to be but I’m a huge fan of contributing whatever you can even if small amounts (they definitely add up).
I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $960,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.
I work myself so i don't get a paycheck weekly.. I sell on ebay (13 years), i get daily payouts into my capital one online banking account.. I Dont pay taxes UNTIL the end of the year when i file my taxes.. Can i still open a Roth IRA and add money weekly/monthly from my ebay account?
You just have to earn the income you put into a Roth IRA. I can't advise on tax situations though so consult with a professional if you have questions.
Of course if your investments lose value. You can leave it in cash inside but that loses value to inflation. You have to select the investments you are comfortable with after researching. This is just a type of account.
I am confused. Contribute consistently over time? Isn’t $6500 the cap and that’s that? Wouldn’t it be better to just hit the cap asap? Or is it a yearly cap? So one can contribute up to that amount every year?
It’s a yearly cap. Last year you could max contribute $6,000. This year you can max contribute $6,500. Whether it’s better to hit it asap depends on if you can drop the max contribution in at once or not. Some people can and do. Others contribute consistently all year. Really depends on preference and financial ability.
Of course if you are eligible based on the IRS guidelines. You can't open one for a family.. they are INDIVIDUAL accounts. You can always use the money on your family but it's an account in one individual's name.
This is the best video I've seen so far for beginners. You didn't waste too much time telling me to open one and instead you educated.
Thank you! That was the goal so I appreciate you saying that.
@@PenniesNotPerfection I opened a Roth IRA while watching this video!
@@PenniesNotPerfectionwhen you say we can contribute with after tax money you mean every week s paycheck we can direct some of that money from our direct direct deposit account into our IRA?? Also we can withdraw some of our contributions if needed but not the earnings does the broker keep both amounts separate showing that on the account so we know which are one or the other??
I invest in the Fidelity 500 index fund with my Roth IRA and it’s all I need. Great fund! 👍🏻✌🏻
This was extremely educational! I have a Roth IRA and had done some research on it, but I still learned a few things in this video, so thank you so much.
I'm thinking about opening a Roth IRA account . Hows your Roth IRA journey been going
Wow - thanks learned so much I’m 62 and still didn’t understand all of this juts opened a Roth but was still lost best explanation ever 💕
Glad it was helpful!
Whether to use a ROTH or just an IRA really depends on one factor. What is your current tax bracket, its all about taxes. If you are in a low bracket today like 12%, go with the ROTH. If you are in a high tax bracket 24% and higher, stay with a regular IRA and get the deduction now.
You can't predict your tax bracket when you are old and using this money. You can only base your decision on what your current taxes are. If your tax situation changes, you can start contributing the other way. So have both accounts.
401K can take precedence if you have a match, you always want to take that.
Thanks for sharing!
I find it impossible to predict what my tax bracket might be in 30-40 years so I do both pre-tax and after-tax investing for long term purposes.
I also find Roth accounts to be useful if retiring before Medicare kicks in. Roth withdrawals are not considered income when determining how much ACA insurance subsidies a person is eligible for. Depending on a person's withdrawal strategy, topping up with Roth $ could save you thousands in health insurance costs.
Thank you. I got stuck on what to do after you started the account. You explained it perfectly.
So glad it was helpful!
Perfect timing! I’ve just been trying to get ready to start my Roth IRA, and was feeling overwhelmed for sure.
You got this!
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Hi Mary! I am so grateful I stumbled on your video. I don't leave comments as often as I should, but I just want to thank you for sharing this information. I've been putting this off for several years because of overwhelm, so it was extremely beneficial to hear you talk through that feeling. I love how personable you are & I truly felt like I was getting advice from an older sister who knows what I need to hear 😅 I am happy to say that I'm finally pushing past the uncertainties & setting myself up for success. I know I'm late to seeing this video, but you gained a subscriber & I can't wait to check out the other videos on your channel. Thanks again. 🙏🏻
This comment makes me soooo happy! I totally understand the uncertainty and wanting to put it off. That's what so many people do when getting started NOW/early is the best possible option. As your internet big sister, I just want to say I'm sooo proud of you!!
I just found out about a spousal Roth IRA for those of us with no earned income. Hope to open one this year
Yess! Those are a great option!
O0o I need to Google that!
Finally I understand Roth IRA. Thank you very much.
So glad!! It’s a great tool!
Thank you for doing this! I just rolled over 2 of IRAs to our credit union.
Nice!
Does your cu, allow access to actually invest inside the Roth,mine did not! So I had to roll it to fidelity
Thank you. I've listened to this the whole way to work. Will listen again. It's been 2 years I've been trying to figure this out. Definitely crunch time and like you said has been so overwhelming. I'm in a point in life I need to act NOW. This video makes sense for me
So glad to hear that! Definitely take action today! Come back and let me know after you’ve opened your account.
Great video
I wish there was someone who made and much sense as you do when you talk about investing where I live. I'm going to have to research this here and see how to get on board. Thanks Mary, inspirational as always 💕
Aww thank you! You are in Scotland, right? I’m sure y’all have soooomething there!
I'm in Ireland, but it's close enough 😂😂. I'm definitely going to start researching some investment opportunities here. I'm really interested in this. Also credit score too I'm going to find out what mine is now just to see.
This is second time watching. I just opened mine today because of you so thanks for that! I just need to listen on more time girl! I'm so new to this but I'm willing to learn.
So excited for you!!!
thank you for your video. I just opened my vanguard ROTH IRA. I am still a little confused how it works but I just have $200 in there for now. I am hoping to add $100-$200 a month.
Great job! Vanguard is a wonderful company and it's owned by its users which makes it even cooler. If you consistently add and then invest in either an index fund or target date fund you dont have to worry too much about it.
Seriously, the best beginner video I have seen so far. I subscribed. Thank you
So glad! Welcome.
Our Roth IRAs are probably super similar! Roth’s Ira with vanguard + broad index funds 😃
Yaaaasss!!! 🙌🏻
Good content 👍 Good point to just get started with something you're comfortable with... You can always transfer account in the future. I would also say keep educating yourself. The more you know they more you will know what you will wanna do with the Roth IRA. I read several books about the Canadian version of this (TFSA) before I started and it helped me make better decisions.
Yess! Great points.
Thank you so much for this informative video. I feel much more confident to start my IRA now.
So happy to hear that!
*Great tips on the Roth IRA!* 👍
Thanks Tom!
Amazing video and extremely informative! Thank you so much for putting it together.
Great video! I want to start a Roth IRA this year, I’m just debating on when. I do get an extra $600 a week from the CARES act, but so far I’ve been putting that all towards my student loans. In a few weeks I could pay off another loan doing this. I’m just not sure I want to put it off an another week to start my IRA. I’ll probably change my mind another 5 times before I do anything
Totally relate to constantly changing your mind on which to do! 🤣
Need to take notes!! Thanks...also on behalf of others who will benefit but might not say thank you.
Thank you for saying this! The majority of people never comment but a few have reached out and told me they opened Roth IRAs after this video and it's made me soo soo happy! It's such a great tool for people to save for the future!
You did such a good job explaining in this video! I have never totally understood what a Roth IRA is, even though I have one, lol, but I've never been able to max out my contributions. I just bought your Roth IRA tracker to help keep me on track with contributions. The video and tracker together will be really helpful, I think.
You got this!
About to max out my Roth IRA in May, think this the earliest ice done so in the past 10 years, goal is to also max out wife's!
This is the best video I've seen for beginners! Thank you!!!!
thank you sooo much...shame no one schooled me on finances early......learning late but learning!!! 305
I've never left a comment on a UA-cam chanel. This is also the first $ i have ever watched. Thank you for making the info friendly to take in. I have loads of little questions.
Can I have more then one Roth IRA account? Can I open one for my daughter? And so on. Thank you for makeing this simple and shame free!!!!
Thanks for watching! Great questions.
You can have more than one Roth IRA but you are still limited to the contribution limit between all accounts.
You can if she has an earned income. You can only contribute earned income so if she has a job or income source and files a tax return then yes! If not, then no.
This followup video might answer some of your questions! ua-cam.com/video/UkPLPEsRmJI/v-deo.html
Okay, thank you so much! I will go watch the other video. I suspect that you have to pay taxes on it one way or another.
Thank you for your advice and support
thank you so much! this was so helpful. making the step to open an account can be very intimidating, but you helped so much!
I'm so glad!
I enjoyed how you explained this information. It was personable and felt honest.
I really appreciate this video. You did a great job explaining to me to at least get started!
Glad it was helpful!
Thank you so much for your informative videos 🙏
I don't put anything to a Roth IRA because I already have a Roth 401k at work, it allows up to 19K a year. So, I'm not close to maxing yet.
401(k) maximum contribution is *$19,500.* It may be better to max out your Roth IRA before you max out your 401(k) especially if you don't have an emergency fund.
Great video exactly what I was looking for
Queen!!!!! This helped so much I love you
Do you you have a Roth IRA? Do you love it as much as I do?! Learn more about Roth IRAs: penniesnotperfection.com/roth-ira-101/
Where to open a Roth IRA:
⭐ M1 Finance ➝ penniesnotperfection.com/M1Finance
⭐ Vanguard ➝ investor.vanguard.com/home
⭐ Fidelity ➝ www.fidelity.com/
I’m 22 and just opened one with chase banking (Roth RIA) hopfully it turns out good! Still learning!
How’s it going so far if you don’t mind?
This was awesome! I'm 58 and actually considering early retirement. I have 401k at work and just now trying to decide what to do with it when I stop working. Do I leave it right where it is or do I roll it over to an IRA, more specifically, Roth IRA? This video and all the information you shared will definitely help alot. Thank you!
I always roll over my 401ks so I control them. If it’s a regular 401k you have to roll it to a traditional Ira. You can then convert it to a Roth IRA but will have to pay the taxes to do so (consult a professional on that!).
We have the RRSP in Canada and love it as well! 😀👍
Thank you 🙏 for your help,
Happy to help!
Thank you for the encouragement,finally opened an account with vanguard👏🏽👏🏽
Is it too late to fund 2019 since we have already filed 2019 taxes?
Congrats! I’m not sure legally the answer to that, i would check with a pro!
I'm new to your channel and love how you explain things. Funny enough, this is a topic that has been on my mind lately, and need some guidance in rolling over money from one account/company into another one. How does one get in touch with you with help for unaddressed questions on the investing portion on money on the Roth IRA?
I love my Roth IRA as well plus retirement with employer!!
Yess! Do you have a 401k with your employer or another type? I love knowing these accounts are sitting in the background growing for me to provide in the future! 😀
Pennies Not Perfection yes most definitely!! 401k with employer that I don’t even think about ☺️
If you can only put in 6k in the IRA annually, does this mean the amount you open with is a really meaningful starting point? Like you want to open with as much as possible? Or can your starting point only be 6k anyway as well? Thanks
My husband uses Fidelity for his 401K. Stay safe.
A lot of people do which makes it nice to have a Roth IRA there too!
Thanks for the breakdown. Great explanation!
Everytime money transfers from my check into the account do I need to choose where that money is being applied? Or does this automatically happen?
Most helpful thank you!
Much needed video, thanks for making it!
So, IRA is money invested that is not taxed yet vs Roth IRA is money, invested, that has already been taxed and will never be taxed again?
Seems like a traditional IRA might be better because it might be better to be taxed upon withdrawal, later, like in retirement, because the taxes would be lower in retirement, or am I wrong? :-)
Thank you mary! Thanks thanks thanks ❤
Hey so a few questions!
So it’s not just about putting money in amd walking away? I have to pick something to invest or a target date as you said.
But if it’s considered investing in then what happens is whatever you chose to invest in goes bankrupt or stock market crashes?
Maybe I’m not understanding lol
Yes you have to pick an investment.
If the stock market crashes you can lose money. If the company you choose goes bankrupt you can lose money.
Pennies Not Perfection lol now i see. So lets say I’ve been putting in for 3 years and company goes bankrupt do i only loose the money earned, what i put in only or both I feel like that is something that people aren’t talking about with Roth IRA.
Love it! Such a good investment opportunity for folks like me that aren't ever going to be bringing in those fat salaries. Took me an embarrassing amount of time to realize the 6,500(for 2023) is the MAX deposit you can make, not the minimum. You can open an account and invest with far, far less initial investment. Wish I'd opened up my Roth a decade ago!
Thank you so much, I know nothing about Roth IRA and you clarified it perfectly.
I have one question, is there any possibility that I can lose the money I am originally contributing with.
For example, I put 5,000$and with inflation or anything, I would find them 3,000$
Thank you again
Happy to help!
If it’s invested there is always a level of risk that you can lose it. You have to weigh the risk of the investment you select against doing nothing with your money (which loses the value due to inflation if it’s just in cash).
Hope that helps!
@@PenniesNotPerfection thank you so much
the only video that actually made sense. thank you!! haha
Glad it helped!
How much money do you need for the first deposit?
It depends on where you open it! Most traditional brokerages require $500 or $1000. Some of the roboadvisors online start at just $1. I left a couple links in the description or you can google based on how much you have available to start.
@@PenniesNotPerfection thank you!
When I did it through my state job and another employer they didn’t need a specific deposit amount,, I just started with what I wanted and it automatically goes in with each check
So Roth IRA earns interest base on the performance of the investments you have in the account? Is a Roth IRA like active traded securities where you buy low and sale high to earn a profit? Or is it like a CD where you parked your money for an amount of time and then earn an interest once it has reach its maturity?
It’s just an account type. You pick what goes in it. Could be cash (earning nothing) or any other investment like stocks, mutual funds (earns returns). It’s up to you because yes it earns based on the performance of investments in that account.
Also what about owning just single stocks on m1 finance while having a Roth ira
Thank you for sharing. It would've been great if you talked about rollovers for a Roth IRA. When does IRS tax you for Roth IRA's?
They don’t tax you because you are putting in money they already taxed. So they don’t tax it again. Thats why Roth accounts are great.
Hi, @penniesnotperfection, I have a rollover from my job that hasn't been taxed yet. I put it in a traditional IRA but I am now interested in a Roth. My question is at what point can I get it taxed so I can put it in a Roth IRA? It hasn't been taxed yet
Oh gotcha, your question didn’t say that. If you are converting traditional contributions to Roth you will have to pay taxes the year you convert it. The amount you choose to convert (you don’t have to convert the entire account) will be taxed as ordinary income in the year you convert. So you’ll need to have enough cash saved to pay the taxes on the amount you convert.
Also I’m not a tax professional so you should really ask them these questions! 😊
@@PenniesNotPerfection thank you so much. I understand what you mean regarding consulting a tax professional. I appreciate the information you have provided.
Great video!!
If I have money for retirement,And I like to put it in Roth IRA ,what are the risks of losing my money? Is it just like 401k the risk in 401k is high.
The risk is based in what you choose as your investments. Roth IRA is just a type of account. You could choose to just let it sit in cash (not recommended) or you can choose lower risk investments instead of the stock market. It’s up to you!
401k is only high risk if you invest in something risky or have a bad plan at your company. But the risk of not investing is much higher because you will be losing out to inflation.
Thank you for the great advice!
My current employer does not offer a match 401k. I already have a ROTH IRA account with Franklin Templeton. I also have a qdro 401 k. Should I transfer the qdro to the ROTH IRA and not the 401 k with my current employer?
I’m 23 in law school, so I don’t have a job aside from summer internships (that sometimes pay). I have some money saved up and have been hearing a lot about Roth IRAs. Can I open one with no income? & Just put all my savings in there?
And also- You mentioned how I can pull out my contribution at any time. But I can only pull out the total contribution + earnings when I reach retirement age?
Thanks so much!
You have to have earned income for the year to contribute. Saved money is not the same.
Correct on earnings at retirement age. You can do it before but will be subject to penalties and such which will eat into the returns.
If you had a job in 2021 you may contribute to your 2021 Roth IRA. If you work anytime this year you may contribute to your 2022 Roth IRA.
Oh boy I am sooo lost. I have one open but no money in it. I’m scared to add money because I don’t know how to do anything with it 😢
Do you have 401(k) at work and is there a company match?
When you add money you then pick something to invest in, like a S&P 500 fund or whatever you select. Most brokerages have an option for you to get help from someone there for free or have a selected investment plan that’s moderate or aggressive. I can’t recommend investments and it depends on where you opened one but don’t be scared to put money in!
Great tips. But tried to sign up and when they ask for how much money you want taken out for 2020. Do they mean in general or per paycheck?
I don’t know specifically what you’re asking so you’d need to contact the company where you signed up to get specifics!
I have no idea about any of this...can you lead me to a video that explains just general terminology? When you start talking about picking...I get lost at what you are talking about. I have ACORN but have never started an account
Should be a good idea if you open a Roth IRA even tho if you have a 401k
I am a college student who will be graduating with a fair amount of debt. Right now I could only probably put $30ish a month into a ROTH, is it worth it to start like that?
Anything you invest will grow over time, even small amounts. I started in college and I'm glad I did. You can't go back and invest for years you missed. I can't advise on your specific situation without details but that was my experience.
What if my regular gross income is around 100,000/year but since I do a lot of overtime my gross income exceeds >140,0000, am I still eligible to open Roth IRA? Does it stop taking contributions when I reach the maximum per year as individual?
Like why are we investing in stocks in all that in our roth iraa accounts? Like we can do that in our regular brokerage account. Like is their a difference in doing that in the roth account then a brokerage account?
In your Roth you are doing it tax free on the gains. In a brokerage account you are going to pay capital gains taxes which depending on how long you hold something can be substantial.
So then for the Roth IRA you still have to pay taxes on your earnings from investments?
If your work is offering 401k with ROTH IRA is it a good place to start? Or just get an IRA different from Work
Roth 401ks are great! The Ira and 401k are both going to be with post tax income if it’s a Roth.
Fantastic!!!
What happens if I can’t make the 6k contribution by the end of the year? I’m only investing 2-3 hundred monthly
You don't have to do the full amount. That's just the max. Anything you put in is great!
What if I want to add money monthly.. Is it just gonna sit in my account until I use it or do I have to keep buying stocks per month?
You have to make sure it's invested every time you put money in. Otherwise it will just sit in the account as cash and earn nothing.
@@Ifiok28 You have until tax day (typically April 15) of 2023 to contribute $6,000 to your 2022 IRA.
How about the risks?
The risk is based in what you choose as your investments. Roth IRA is just a type of account. You could choose to just let it sit in cash (not recommended) or you can choose lower risk investments instead of the stock market. It’s up to you!
Can I use the account to secure a line of credit for a house?
Great video.
Thanks!
Financial Queen!
:)
I just opened a RothIRA savings at my credit union. Is it better for me to max it asap or slowly over the year as far as the interest that i am earning off of it. Mine is yearly with the highest interest rate to earn. and it's rothira savings different than an investment one where you use stock, gold, real estate... Im not sure of the difference or if there is a difference.
Is the income limit based on gross income or taxable gross income?
I opened a roth IRA in Charles and schwab but do not Know nothing about it for exempla I'm confused on this + $5,200 .80 ( 26,284.60%) 2- year change, what it means?
It's been years since I had one of these and truthfully I regret not keeping my Roth IRA and continuing with it , how much do I need to contribute and continue to contribute to open on ?
Hi, I’m new here I liked the information, I want to start but I’m kind of lost how to start , help please
Where I can invest like ROTH IRA is already passed the limit and second question what happens if I’m under the limit contribución and the next year I pass it.
Are you familiar with *_back_** **_door_* Roth IRA?
Do I have to max out my Roth IRA every year? Or can I just max it the 1st year and let it sit there till retirement? will it grow by itself or do I have to pick where I invest the money so it can grow? Will I get penalized if I can’t max it out? Does it have to be paycheck money/direct deposit or can I use my savings account money to invest?
You don’t have to. But it’s best practice to do so if you can. There is no penalty if you cant.
You have to choose your investments.
I have a question. I thought a roth iraa you just put money in it and let it sit and grow. Why do you buy stocks and things like that in your roth iraa? Like if you put a a lot of money in the iraa and you buy a stock in it crash you losing all your money in the iraa
Money doesn't just sit and grow if it is not invested in anything. If you put it in a Roth IRA it will just be in cash until you pick investement. Cash does not grow and because of inflation will lose value.
How does it grow though???? By investing it to stocks or does it just grow????
You have to invest! You pick index funds or mutual funds or stocks or whatever investments you want and the growth comes from that.
You try Roth IRA in New york life company?
Thank you so much. I feel a bit more confident to open my ira now. Do you still recommend vanguard?
I do! I love their funds and the business model. But I do recommend Fidelity as well because it has many of the same features but a better user experience on the site/app and easy to do fractional shares, and a few other pluses. I also recommend M1 Finance because it's my favorite investing app currently and they also offer Roth IRAs.
@@PenniesNotPerfection thank you! 💚
Can we open up Roth IRA’s for our young children. I know we will have to contribute for them, but just wondering 😅 sorry if that is a stupid question 😬
You have to have earned income for a Roth IRA so they would need a tax return for any money put into one. People do them for kids when they pay them for work done in businesses or earned other ways. I'm not an advisor though so definitely double check with a tax professional!
If you are only able to contribute a small amount per year is it worth it to open a Roth IRA? I max out my employer match on my 401K, but I’m looking for other ways to save for retirement, but still pay off debt.
Well it depends on a lot of factors like your tax rate now and what you expect it to be but I’m a huge fan of contributing whatever you can even if small amounts (they definitely add up).
I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $960,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.
I have a 401k and they have 100% match. Should I open a Roth IRA? Should I have both?
Does the 100% match have a limit? Or matched all the way up to the max? If it’s to the max I’d do that.
Is there a difference between IRAs for self-employed and employed? I tried making an account with vanguard and they want my employer number
We’re you trying to make a sep ira as a self employed person? If so they want either your ssn or ein for the business.
I work myself so i don't get a paycheck weekly.. I sell on ebay (13 years), i get daily payouts into my capital one online banking account.. I Dont pay taxes UNTIL the end of the year when i file my taxes.. Can i still open a Roth IRA and add money weekly/monthly from my ebay account?
You just have to earn the income you put into a Roth IRA. I can't advise on tax situations though so consult with a professional if you have questions.
Would you recommend have both a Roth and 401k?
Depends on your financial situation overall. I had both before I left my 9-5 job.
Ok thank you
So you can lose money too?
Of course if your investments lose value. You can leave it in cash inside but that loses value to inflation. You have to select the investments you are comfortable with after researching. This is just a type of account.
Is this available for non-US citizens? I'm starting to get the feeling it isn't.
It is not. It's a US type of account. You may have similar in your country.
I am confused. Contribute consistently over time?
Isn’t $6500 the cap and that’s that? Wouldn’t it be better to just hit the cap asap?
Or is it a yearly cap? So one can contribute up to that amount every year?
It’s a yearly cap. Last year you could max contribute $6,000. This year you can max contribute $6,500.
Whether it’s better to hit it asap depends on if you can drop the max contribution in at once or not. Some people can and do. Others contribute consistently all year. Really depends on preference and financial ability.
I have Merrill Lynch.
Do you like them? I’ve not heard much from their customers!
Its from the bank I bank at. Yes I like them. I don't know anybody else they handle my IRA CD and my CD
I have 401k from employer, but i want to open Roth Ira, is that ok ? Can i open roth IRA for my family (for my spouse n children)
Of course if you are eligible based on the IRS guidelines. You can't open one for a family.. they are INDIVIDUAL accounts. You can always use the money on your family but it's an account in one individual's name.
Wow just starting I WANT to invest 5000 in a Roth IRA. Please help
Open an account! Start small. 😊