The $65,000 Roth IRA Mistake To Avoid

[@JarradMorrow]

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[@200Nora]

I did not work last year. Is there a way I can contribute? I know the implications if the contribution is not a pretax money. I have save money from former years or work. I am also single no husband to contribute. I am feeling the pain of not been able to contribute.

[@JarradMorrow]

Not unless you're married and you file your taxes jointly (the first mistake I talked about)

[@part1801]

My question is, wouldn't one Roth IRA that you contribute $6000.00 vs having two at $3000.00 result in higher dividends from compound interest over time assuming both investments are giving about the same rate of return?

[@alrocky]

@@part1801 No: $6k * 5 growth = $30,000. [$3k * 5 growth = $15,000] + [$3k * 5 growth = $15,000] = $30,000.

[@jacktran01]

10k for a investment into a House gives a much higher return then 6.11 if rates are low as your mortgage rate would be outpaced by equity growth and the mortgage gives the 10k 4-5x leverage.

[@stevendiaz7633]

Im 40 and just graduated from accounting and im starting. Its not where you start but where you finish

[@hmr7218]

Your my hero I'm also 40 starting over just bought a house😊

[@magicdinho107]

About to be 35 and this is encouraging, LETS GO!

[@JOESUBA122]

I am 52 and just started my Roth IRA! I know I am behind the ball but I will do the best I can to get my life in order! This is great

[@JarradMorrow]

Love that mentality. Keep up the good work 👍🏻

[@anamedina6690]

you are not alone. Im 44 and just learning about all of this

[@JamesBurchette]

Just opens mine today I’m 27 and I feel stupid for how long it took to get my life straight

[@Savsal12]

@@JamesBurchetteyour in good shape bud. Compared to other people

[@matthewwilliams9200]

Never to late to start try to get out of debt first and secure a paid for house at same time

[@rustyme1122]

I've been retired going on 5 years. Have a decent size Roth account. I'm going to cash out about half of it and buy my dream car, close to 150k. Don't tell me it's a dumb idea. Saving your whole life and not buying what you want is a dumb idea.

[@JarradMorrow]

I don't think that's a dumb idea if you can afford it so I'm happy for you! 👍🏻

[@Jack-id4qm]

Hey what's your dream car? I'm a car guy I just gotta know. Also big congrats 👏

[@rustyme1122]

@@Jack-id4qm 🚔Porsche 911 not sure what trim yet. I'll wait a few months and see what the market does. Lots of rumors a big market crash is imminent. Also waiting on the release of the 2024 models. Hopefully will take delivery in early 2024. 👍

[@alceja3522]

@@rustyme1122 u only live once enjoy that porche my friend!! Heck of a car!

[@Crittek]

Hell ya brother! As long as you know it’s not ruining all your hard work, buy it! Being that you’re a Porsche fan I’m sure you want RWD. Being an older gentlemen, a manual? For that money you can get a GT3 RS, cream of the crop really. On the less expensive but still incredible side, the Carrera GT.

[@tblade_org]

Thanks for the information. I am 23 and just opened my Roth IRA yesterday.

[@prettygirlrock1106]

Just opened mine today ❤

[@tblade_org]

@@prettygirlrock1106 Glad to hear it. What are you investing in inside of it?

[@GodwillhandleIT]

I want to tell you that in the past years I've watched the youtubers which you described in your videos and it wasn't until I watched your video today that it actually made sense, what you are saying is the RIGHT thing to do. I've subscribed to your channel, thank you for the insight.

[@nikumimito3164]

38 and just opened retirement accounts late last year for the first time in my life. I maxed out my Roth IRA for 2023 just 2 days ago, I definitely plan to always max that and my 401k from now on.

[@BadPhD777]

Preach it brother! I love how you don't beat around the bush and tell people how dumb it is to withdraw from a retirement account before they are retired. Money in before retirement, money out after, period.

[@JarradMorrow]

That one makes me cringe so much whenever I hear about someone doing it.

[@BadPhD777]

The government gives too many ways to use your retirement money before retirement. If they want to really help people, they need to get rid of all of the exceptions.

[@johnussery3386]

I've made mistake #4 early on. My "financial advisor" told me about all the great benefits of an Roth IRA, but didn't tell me I had to invest it. Sounds silly now, but I didn't know much about investing and assumed they would do it for me. After about a year and no growth other than my contributions, I figured it out. Now I use the basic three fund portfolio (VOO, BND, VSGX).

[@JarradMorrow]

Thanks for sharing! I’ve talk to at least 5 people who made this mistake. As obvious as it seems, I still felt it was important to mention.

[@michaelswami]

That’s how we learn. Good choices!

[@DestinationRetirement]

@@AshorinaG Yes, I have a Roth at Fidelity. They are helpful there.

[@LittleMopeHead]

I just realized this today! I didn't know anything about this. After 4 years of opening the account and depositing max every year! 😬

[@MrPennstate2014]

🤦‍♂️

[@minsubsong5578]

Thanks for the video! I’m putting about $3800 Roth 401k and $3600 in HSA. Plus about $2800 in Roth 401k for company matching. I’m 33yrs old. And unfortunately I’m starting fresh on my retirement cause I took all out for dumb mistakes. It’s a bit late but I think I can still make it to a peaceful retirement, if I continue at this level or more in the future. 😊

[@BeeTimesTwo]

You’re still young, you got this!! 💪🏻

[@EMan-cu5zo]

Don’t feel bad I didn’t even get out of debt till 35 and started investing at 38. I had prior 401k plans but I always figured I would be dead before I hit the age so I sold and took the tax hit. Since I had my daughter I figured if I die beforehand she can get the money. So now I have the 401k, Roth IRA, and a standard brokerage account. Need to look into the health savings account though. The market is terrible right now and I personally feel it will stagnate for the next decade so bad timing. The last fifteen years was when all the money was made.

[@catherinesanchez1185]

Try being in your 50’s and you got wiped out during the last recession and now your starting over !!! You’re doing fine

[@TheFlyingZulu]

@@catherinesanchez1185 To avoid being "wiped out during a recession", don't cash out your entire investment in a recession... Just let it ride. The market will go back up.

[@Imhere12345]

At least you learned from your mistakes. Keep grinding

[@Anon21486]

#10 - I am not 100% sure about the penalties myself but my understanding is that if you contribute more than you are allowed to in a given year, you must withdraw to the limit as well as any gains you obtained from it. The gains will be taxed at the current year's rate and a penalty will also be added for withdrawing before the allowed time/age.

[@alexjones7845]

That's correct. You have to fully undo the contribution so the retirement account has only the funds (and gains) it would have if you contributed the correct amount. I had this same issue. Easiest way was to call the brokerage firm that held that IRA roth and I told them the actual lower contribution limit I had to follow (due to income) and the brokerage firm helped to calculate the gain on that overage.

[@davestung]

@@alexjones7845i i made more than the income limit to contribute to roth, and been contributing since 2020. Now i know i have to do the backdoor. However, how do i fix my contributions for the last 3 years? Would i have to pay early withdrawl penalties and start all over again?

[@mplslawnguy3389]

@@alexjones7845 With most of the big brokerages, you can just set your account to automatically maximize contributions every year. There is no reason to go over the limit.

[@OmarJano]

I just opened a Roth IRA account and this video was just the thing I needed! Thanks!

[@terr281]

A little more advanced, but within the Roth IRA, if you focus on dividend paying ETFs, you don't care if the dividends are "ordinary" or "qualified". Since all gains in the Roth are tax-free at retirement age, the tax status of the dividends doesn't matter. Think of this when balancing out your Roth IRA, Traditional IRA (if you have one), 401k, Roth 401k, and... Brokerage account.

[@MrProsat]

Yea, keep capital gains, qualified dividends in taxable accounts.

[@rayzerot]

Focusing on dividends leads to suboptimal returns. The math doesn't lie. If it buys you peace of mind then it's worth it though

[@mplslawnguy3389]

@@rayzerot Yes, you are correct. However there are reasons to invest in dividend-focused funds, but it's not the dividends. These funds generally focus on value stocks, which might be more attractive to an older person. These stocks generally don't grow much, but are less volatile. I use them as part of my fixed income allocation instead of putting it all in bonds.

[@JohnnyMastro]

As a Canadian, we don't have to invest the year of, in order to make use of the contribution room. in a TFSA (tax free savings account), the contribution room is carried forward and no timeline to invest is set :) There is also no penalty for us to withdraw all of our money (if need be!), even if it surpasses our initial contrition amount! All money withdrawn in a year will be available in contribution room the following year! To make things better, Canadians can use the TFSA for life! I just noticed to many differences between a TFSA and a Roth IRA! Great content and info!

[@grady3691]

Well Canadian taxes are insane so…..

[@kidthebilly7766]

roth iras generate so much more money though

[@chancecarlson2023]

The amount you get from an IRA is substantially more, it's not even comparable

[@invertedv12powerhouse77]

If you live in alberta it is not as bad, and arguably cheaper than some states from what I understand.​@@grady3691

[@Ira_Slingsby]

I agree with you 95% haha. If you have an opportunity to buy a good piece of real estate and you need the $10,000 from ROTH, it is not ALWAYS terrible. The 6% appreciation you mentioned is on the WHOLE property, not the $10,000. If you buy a $200,000 property and it appreciated 6%, your $10,000 down payment just increased to a $22,000 equity postion in one year. That next year would be $34k and this is only assuming the appreciation and doesn't take into account the principal pay-down of the loan.
That's over a 100% return tax-free for that $10,000 dollars after the first year. And don't forget, principal pay down, tax right off on interest, and owning where you live/opportunity for passive rental income in the future.
Just saying, you can't create a blanket statement that it's dumb to utilize the aforementioned functionality of a ROTH. For some, that $10,000 will be a massive game changer with gains way beyond even the $100,000 example if kept in the ROTH over 30 years. ROTH is powerful, but so is real estate.

[@jacktran01]

I believe you meant to say $12k

[@caquanw]

Had no idea about the investing part as well. Thought contributing was investing. Thanks for the info.

[@JarradMorrow]

You got it 👍🏻

[@vanessam9784]

I love that you explained how the backdoor IRA work , and how to timing go , well done :)))

[@JarradMorrow]

Glad it was helpful!

[@porcorosso4330]

​​@@JarradMorrow
I thought they closed the back door.
it used to be $6000 limit on Roth + IRA contribution.

[@JarradMorrow]

No, they never closed the back door. The limit increased to $6,500 starting in 2023

[@sammyiboi]

good video Jarrad. This covered all the foundational pieces of Roth IRAs. During the video, I kept thinking, "I hope Jarrad won't forget to talk about " and boom, you cover it a few seconds later. The biggest one was splitting a single year's contributions among multiple Roth IRA accounts. I was like, "Phew, he mentions this AND does not recommend it! :)" Awesome!

[@JarradMorrow]

Thanks!

[@danielcutting2796]

Thanks for going over these mistakes

[@JarradMorrow]

No problem. Glad it was helpful!

[@konastuff603]

My biggest mistake is looking at it daily. Oh and selling 74 shares of nvda the day before its earning report and missing that 80$ a share jump.

[@charlesrichardson8635]

I love the flat out advice on early withdrawals. Early withdrawal ignores the power of compounding. I am sharing this with several of my friends of various ages. I wish Roth had been more available during our accumulation time. We have converted when available much of our funds to ROTH. Great, straightforward, fact-based advice!

[@mplslawnguy3389]

How old are you? Roth has been available for a long time.

[@rsreidjr]

Thanks Jarred, I really enjoyed this video. I am new to investing but I do have 3 Roth IRAs, one with Scwahb, Fidelity and Vanguard. I like ETFs and Index funds with each company but I wanted to “test drive” all 3 for a year or two and then settle on one for the next 20-25 years. Thanks for the content and I can’t wait until the next video!

[@jsupensky]

I currently have Vanguard, I enjoy it but hear decent things about Fidelity(and there zero cost index funds).

[@danielm3192]

I have one Roth IRA with Marcus which is auto-invested which I started last year. Was it easy to set up multiple Roths? I’m trying to decide which to go with next. I haven’t added for 2023 yet. Do you have a favorite? And you can roll them together later once retired? Thanks

[@drewmqn]

Remember, the contribution limit is for all your IRAs together. You don't get to double or triple up because your have more than one account.

[@juliegill9322]

​@@drewmqnthoughts on robo advisors?

[@2WinorNt]

I somewhat disagree about not using the money to buy a house, although the appreciation of a house is lower then ETFs, assuming returns of 8%, but if a house is a goal of yours then what better way to use it. A house gives you tax perks too and collateral to low interest loans to start a business or renovation to appreciate the house in value and gain income from it if you want to rent it out. Although, I used to max out my 401k and then some to Roth IRA until I purchased a home, now slowly increasing to max it out again, best to consider the short and medium term too, because that's where you will be doing most of your living.

[@nationsquid]

You explained this so well. Thank you!!

[@TheMotionBboy]

Amazing video, good sir!!! Instant like and subscribe. Here’s one little known fact that no one ever talks about when it comes to a Roth. Whenever you re do this video, please add the “Married Filing Separately” condition of the Roth. I got married last year and my accountant broke the uncomfortable news to me. 😩😩😩

[@allisoncornell5823]

I know it's been a while since you said it, but I still find myself saying "A-dios" at the end of the videos!

[@JarradMorrow]

😂😂 omg I haven't said that in a video for a very long time

[@insomnia9999]

One of the few people on UA-cam with some sense 👍🏾

[@manny69]

Needed this video man I opened up an ira and was thinking what if I ever need that money but ur right its for retirement and retirement only

[@JarradMorrow]

Happy to hear it helped. It's something a lot of people struggle with so it's not just you. Building up an emergency fund will help prevent you from ever needing to touch Roth IRA money if you get in a pinch.

[@NikkiBeDoingStuff]

Thank you! This was very helpful. It looks like I’m on the right track.

[@JarradMorrow]

Great to hear!

[@thetacticalaccountant]

Finally. I am getting married and could not get a concrete answer if we could both contribute the max amount. All I got was answers on the income limit.

[@JarradMorrow]

Congrats on getting married! Glad this answered your question

[@blaquopaque]

It's a good time to take a beat up 401k and do a Roth Conversion if your stocks are really beaten down. Then you'll only pay taxes on the much lower current prices, and your Roth will be tax free.

[@c0wboys4life]

Can you do a conversion of your 401k to a Roth if you’re still employed by your job?

[@benborgschatz9525]

You can but you'll get taxed on everything you rollover into the Roth 401k.

[@Omego2K]

There is always a Roth 401k

[@MalluStyleMultiMedia]

@@benborgschatz9525 is it still worth it ? I’m getting 6% employer match with my 401k now. So is it smart to convert that to Roth 401k, if that’s possible?

[@benborgschatz9525]

@MalluStyleMultiMedia If you believe you will be in a higher tax bracket during retirement than you are now, a conversion will likely save you money. I recommend talking to your tax professional before rolling anything over.

[@Nsayles]

Just opened one today with fidelity, I'm 38, better late then never

[@_Renee2]

Dude, thank you for sharing! I have so much to learn.

[@Tris-Mimi]

Just discovered your channel, will need to listen and learn! ( I made almost every mistake you mentioned here… )

[@DebtPRZ]

This is a GREAT video. More people to need to know this information. I can’t emphasize enough just important of a topic this is. Good job, @Jarrad Morrow!

[@JarradMorrow]

Glad it was helpful!

[@keithgour2238]

Awesome advice. I currently invest into a Roth IRA with Fidelity in good growth stock mutual funds only. These mutual funds have a long track record of outpacing the S&P and a decent dividend yield. I also have a company 401k that I'm capitalizing on with the employer match as well.

[@FirinMahLazer1]

On the point of automatic investments. I had to set mine up with Schwab and just know that you have to set up the automatic draft from your bank account to the IRA then set each each mutual fund or whatever you're buying separately. Example would be you have to set the draft day as every Monday it pulls $150 then on Tuesday it buys $50 of mutual fund 1, $50 of mutual fund 2, and $50 of mutual fund 3. I assume most large brokers are like this and was a little more convoluted to set up than I originally anticipated.

[@BermudaBrian]

I just found your channel and LOVE you info. It has helped me A LOT. With this video, I had opened a Brokerage Account w/ Fidelity and was days away from investing in the Brokerage AND Roth IRA.... Luckily, i watch the video and am going strictly with the Roth IRA. Appreciate the help!

[@MattMcConaha]

I don't think the early withdrawals are as bad as being stated. I mean, it sucks that the money doesn't get to grow tax free anymore since you won't be able to re-contribute it, but you can still invest it elsewhere and get the same gains minus tax. So taking 6500 dollars from your Ira costs 65000 dollars in the same way that taking it from your taxable brokerage account costs you 55000 dollars or whatever. But if you are borrowing from your Ira and plan to reinvest it after your financial risis is over, it actually costs the difference of 10k or whatever, not the full 65k. So don't take it from your Ira if you have otheplaces to take it from, but if you gotta do it then you gotta do it.

[@JarradMorrow]

Thanks for sharing your opinion 👍🏻

[@mattieice2988]

Your hired Immediately !! Wish i could stop buy your office Today well Done

[@abufarhaz2306]

I wish you had created that video six years ago. Over the last six years, I invested $25k, continuously buying risky stocks along the way. My portfolio is now valued at only $8k. What a loss I've incurred. According to your calculations, I've missed out on almost $380k in potential future earnings.

[@veganmamafourgirls5370]

Thank you for explaining all of the ins and outs of Roth IRA's. I just opened one, but haven't funded it yet. I am planning to fully fund and invest it before tax day to get last year's contribution and then begin contributing for this year! I was defintiely wondering about different accounts at different brokerages, too.

[@JarradMorrow]

Glad it was helpful! Happy to hear you’re going to be able to get 2022 maxed out in time 👍🏻

[@deroxanlit4181]

You explain this so well! Thank you

[@JarradMorrow]

Glad it was helpful!

[@williampennjr.4448]

I can understand why there's a limit with pretax money like in a Traditional IRA, but if the money going into a Roth is already taxed then why is there a limit?

[@khafreahmose8768]

I "gamed" the system by setting up a spousal roth ira for my wife. Now i can max out our roths times 2!

[@prat-man]

Ive been buying individual stocks in my roth IRA for past two years. I am doing well so far. I plan to invest in safer companies for few years atleast and then switch to a 2 or 3 fund portfolio.

[@adange11]

Thanks for the content with no bulls**t. Going to subscribe!!!

[@JarradMorrow]

Appreciate it!

[@pauln8984]

If i have a Simple IRA thats through the company i work for, can i still do a backdoor Roth IRA on the side? (Im over income limit) or does the pro-rata rule not allow me to?

[@emilyboyer9211]

About to start investing at age 25. Newbie question: Say you put your emergency funds in the IRA account. It grows with high interest while you don't have emergencies. If you don't have an emergency, then it stays in the IRA and grows. If you keep it somewhere else and don't have an emergency, it sits with low interest.
Can someone explain why keeping your emergency funds in the IRA is not smart?

[@JarradMorrow]

Short term volatility in the stock market could leave you with less money during a time you need it. Emergencies are unpredictable so there’s no reason to expose it to that kind of risk. The ROI for an emergency fund within a non investment account is knowing that 100% of your money will be there when you need it (peace of mind).
As I mentioned in this video, pulling money out of your Roth IRA before retirement is one of the dumbest things you could do so don’t do it. Ever.

[@akin242002]

Great video! Before even mentioning investing, this should be a starter video on investing.

[@JarradMorrow]

Glad you liked it!

[@moneill75]

@ 11:12 “You don’t want to get caught trying to defraud the gov’t” That’s the politician’s job.

[@JarradMorrow]

😂😂😂 tru

[@cyndigendreau1659]

One question, can my husband and I each have a roth IRA in 2 separate brokerage institutions and max them both at $6500?

[@anonymous-fg9fn]

Should I be maxing out ROTH 457(b) before doing anything else such as roth ira or taxable brokerage account?

[@SuperEmpires1]

I’m 23 years old, did I drop the ball not doing this sooner?

[@JarradMorrow]

Not at all. To be honest, if you started investing into your Roth IRA this year you’d probably be ahead of 80% of people your age

[@stevper6394]

doesnt the loss of taxes put a dent right away at any gains from contributing early to HSA out of pocket bypassing payroll.

[@Force_Wielder]

Love ur vids. Thx. In Vanguard, I have a brokerage, rollover IRA, and Roth accounts. Which investments do u recommend for these 3 accounts?

[@roomoo31]

Thank you for your video. It was very clear and straightforward. It made me feel more secure about investing in my Roth. I am looking forward to watching your videos that you recommended. New subscriber here for sure!

[@JarradMorrow]

Appreciate your support 👍🏻

[@SsroseL]

Maybe you covered this and I missed it but I was wondering if you roll over money from a Simple IRA into a Roth, does that count towards your yearly contribution amount in your Roth?

[@Popitrav]

What happens if the stocks we invest in some home crash ? Would we just be out of all of the money we invested ?

[@cantgetright742]

I max the employer contribution to my 401k and then I match it into a Roth IRA. Everything else goes to a brokerage.
Saving for retirement is saving for retirement. But if I want to put it to work while I wait another 30 years I can.

[@georgialee6755]

Thank you Jarrad.
I’m about 10 years from retirement with around $400k - is it ok to still invest aggressively in stocks via ETF’s? I want to grow my money more.

[@alrocky]

Your risk tolerance and amount of risk you're willing to take is not for someone else to decide. Perhaps another or better way to be aggressive is to contribute maximum $22,500 year and $30,000 once you reach 50.

[@VirgilZandig]

In my first IRA account with $5500, I was so clueless I bought a seven-year bond at like 3.5%. Why? I didn't know what index funds were.
All good now though.

[@FlyingFlaneur]

The algo recommended this video. I liked it.

[@JarradMorrow]

Appreciate the feedback

[@ndwolfwood09]

Great tips! I usually wait till Tax season and ask my accountant which IRA I can put into, if it's not going to affect my income +Tax break/benefit, I'll put it on ROTH and if it does, Traditional it is. ;)

[@mplslawnguy3389]

Roth has such a low contribution limit, I would always maximize Roth before doing anything else. There are Roth 401K and 457b options, that is different, and you may prefer traditional, but you should always maximize a Roth IRA no matter what. It's $7,000 that you won't miss, but will be thankful for when you're 60.

[@REBELLIOUS513]

how does this work for day traders?..can you trade say futures or only make long term invetments?

[@laneca223]

Nobody talked about rule #5 when I searched back in 2021. This is very informative. Thanks for sharing!

[@eduardoagarcia]

Hi Jarrad. Great video. Quick question. When you are saving in a Roth 401k and leave your employer, you could move these funds to Roth IRA WITHOUT generating a taxable event, right?

[@JarradMorrow]

Yes you can. There are some benefits that a 401k offers over a Roth IRA though so make sure you understand those things before doing this.

[@stewdogg42]

Good information. Thank you.

[@JarradMorrow]

You're welcome!

[@Chris-hr2uj]

Great video. I will just add, be careful with a backdoor roth strategy. It is a good strategy and discussed on youtube channels a lot. But technically, the conversion is taxable. If you have full basis in the converted IRA balance then it works. But if you have multiple IRAs (perhaps one from a rolled over from an old employer 401k), then the basis of the converted IRA is imputed based on the total basis and total value of ALL traditional IRA's owned, not just the specific account converted. Consider if you have a large 401k rolled over into an IRA from a former employer, with a zero basis (IRA 1)...that will impact the imputed basis on the converted balance of any any other IRA account (IRA 2), even if IRA 1 isnt being converted. The imputed basis of the conversion takes a weighted average of basis in all traditional IRAs. Therefore, I would not suggest doing an annual roth conversion unless you only have one traditional IRA, and that one IRA is designated for annual contributions and conversions, and it maintains full basis in all its holdings at all times. Otherwise, your conversion transaction may give rise to unexpected tax results. Be sure to understand all tax implications of a conversion before doing one.

[@nilamin2012]

Yeah, I think it’s the pro rata rule

[@lissethnavarro6601]

Hey,
Could you explain this simple?
I'm trying to roll over my 401 into Roth ira, and information about it is much appreciated. What are those implications you Ara talking about?
Thank you 🙌

[@Chris-hr2uj]

I would recommend consulting your tax advisor before doing a conversion if you are unsure how it works. But I will say that the conversion of a 401(k) into a roth IRA is generally a taxable event, because it is converts an account with money that has zero tax basis (i.e. money that has never been subject to income taxes) into a taxable account (Roth IRA). Money that went into a 401(k), and its earnings, were never subject to tax (generally); i.e. the employee effectively gets a deduction for the money that goes into the account and the earnings are not taxed. when the money is rolled into a Roth, that is the point at when the money becomes subject to income tax. Your question is slightly different from a "backdoor roth strategy". If you want to understand a backdoor IRA, i recommend reading the article "Roth IRA Planning", by Amanda Lott, featured in The Tax Advisor. You can find it with a google search. The Tax Advisor is a publication widely recognized by the tax industry. However as mentioned, your question is more of one regarding a taxable rollover of a 401(k) into a roth, which would likely trigger taxable income to you in the amount of the 401(k) balance, which can result in increased tax liability to you. I recommend that you understand the current tax impact, as well as future advantages that result from your proposed question. I hope this helps, but it is both difficult and imprudent to provide advice over youtube on this topic because each taxpayer has a different situation.

[@trevorrabies364]

Just turned 60. None of my retirement accounts are a Roth IRA. Not taking anything out yet. In 3 different accounts. Defined contribution retirement account and 2 rollover IRA’s. Can these convert to Roth for full or partial amounts or am I stuck with them as is? Recommendations?

[@NoneYa899]

I really appreciate the insight. For a 30 year old who knows nothing about investing, what are you opinions on the fidelity GO Roth?

[@CPATuttle]

Yeah that first time home buyer tax penalty exception should not be used

[@michaeltewes7833]

Another thing is You have to leave Roth money in for at least 5 years before withdrawing !!

[@pweey1551]

I know you're not a tax professional, but in the case that I have until April 18 to file my taxes for the past year. If I do a full contribution for that year, would I be able to write off the deduction when I do file? And would this partially/fully be deductible if I have a pension plan? Or will I have to do the math on what is being contributed into the pension at then end of the year and only put in and write off the difference in a tradtitional IRA?

[@Annie-il3tf]

Jarrad, can you please help clarify this as it s so confused. I am very new to this and just recently opened both Traditional & Roth 401k at Robinhood. Robinhood matches 3% and now instead of deposited and had $6500, I have $6695 (195 as matched). This full amount 6695 is cleared in traditional. If I roll full amount over to Roth immediately once cleared, how will this be treated in 8606? Will this full amount 6695 counted as non-deductible contribution? Or will the matched amount 195 will be treated as basis? I am so confused and hope you can help

[@alrocky]

Did you open a traditional *401(k)* or traditional IRA?

[@publicemail9390]

Jarrad, thanks this information is very helpful. Do you have content on how the withdrawal of Roth IRA work? I'm over 61 and have a little cash. I can put in a savings account for about 4% and have access at any time. If I put the cash in a Roth IRA and wait until 65 how do I withdraw? Any help would be appreciated. Thanks

[@ancilborromeo4312]

I am 63 years and putting 20% on my 401k (company matched), is it too late for me to open a ROTH IRA? I don't qualify for ROTH due to my income bracket. Thanks

[@takeshii]

Would you put maxing out the roth IRA at the top of the list if your companies 401k is whack because their matching policy is discretionary.

[@Dat_Guy1989]

Do u have a vid on m1 vs fidelity acct? Pros and cons of both?

[@Stanman519]

Just realized I’m not able to contribute to my Roth because married filing separately. Can I still do backdoor or what is the best move here?

[@alrocky]

you can back door Roth IRA

[@SsroseL]

Great advice! Can you tell me, if I were to take out say $10,000 from my Roth IRA before age 59 1/2- does the IRS count this as income and tax you on it?

[@SankalpDixit]

What is the difference between "transfer money from IRA to ROTH IRA" vs "Convert money from IRA to ROTH IRA"?

[@JarradMorrow]

A transfer would be if you were transferring the account from one brokerage to another. Example of a conversion would be if you converted a 401k or traditional IRA to a Roth IRA.

[@smb8677]

Thumbs up for Mollie

[@JarradMorrow]

She appreciates it! 🐶

[@onlywenilaugh6589]

Of course the Vanguard settlement fund is making 5.28% right now so I'm just keeping my money in it until rates start to drop and stocks get a bit cheaper.

[@invertedv12powerhouse77]

Interesting. TFSA, the equivalent roth IRA in Canada, does not have a limit. Your allowable limit begins at age 18, and goes up every year to how much in total you can have. I think its 6500$ a year rn.

[@robert-tm3qz]

I opened a regular brokerage account on m1 finance... Can I still open a Roth IRA .. Need guidance

[@JarradMorrow]

answered this on your original comment

[@gabys9093]

Hi Jarrad. I would like to know what are your thoughts about Chase roth Ira? If I open a roth ira account, can i say auto invest or do I need to choose the stocks/etc ? Thanks!

[@divo_n1437]

Am currently 23 and am going to start a ROTH or a traditional and “forget” about it

[@juliannapagano5338]

When you do get to the investing portion and realize you invested in something you no longer want, can you sell that stock and buy a new one without penalty?

[@jordanplays2065]

After employee match and then maximize Roth IRA. What’s the next best way to save.

[@JarradMorrow]

Go back to maxing out your employer sponsored retirement plan

[@ronaldsmaka1051]

Great, thorough presentation. I'm 60 and have been a Roth contributor for about 25 years, smartest thing I ever did. I'm only going to speak to the gray hair comment though. One, gray hair is sexy. It's still hair, be glad you still have some. Two, the Just For Men shampoo works great and looks natural. I get compliments all the time.

[@edthom0834]

I opened a roth ira with fidelity and will max out the 6,500 contribute every year. How/what should i invest it in for consistent growth?

[@JarradMorrow]

I personally prefer the 2 fund portfolio which I explain here: ua-cam.com/video/hlWuryxUupE/v-deo.html

[@michaelk2928]

Do you know if Roth contributions have to be reported on tax return? Asking because I'm doing my own taxes, thanks

[@alrocky]

No there is no line on Form 1040 to report Roth IRA contribution.

[@Mericaball]

Does anyone know if there are provisions for taking money from a Roth IRA for a home before the age of 59?

[@RightFootForward11]

Great video for those new to Roth investing! I am in the bracket where I need to contribute doing the back door method, however, it wasn’t clear to me in this video how to do so. Once I convert a traditional IRA into a Roth, how would I contribute to it the following year?

[@ninobk196]

Assuming you have an IRA already, you would need to put the money INTO the IRA first and from there "convert" it to a Roth or move it over to your Roth, but first you need to deposit the money into the IRA. I use Vanguard, so I need to leave the money there a couple of days. When I go to my IRA, there is a "convert to ROTH IRA" button, and then I select the amount I want to move/convert to the ROTH. I use to think it was going to be endless paperwork but it's actually really easy.

[@armaniking08]

Great video Jarrad

[@JarradMorrow]

Thanks!

[@ROMEKBNY]

I don’t see ever having enough extra money laying around to max it out. I’ll be lucky to be able to contribute half.

[@JarradMorrow]

Anything is better than nothing. Do what you can with what you have right now and try to increase over time. Have you made a plan for how you can increase your income over the next few years?

[@omardailey7928]

Great info 🔥🔥🔥🔥

[@JarradMorrow]

Appreciate it!

[@hdsensing]

I max out my Roth IRA and then contribute additionally to my company Roth 401k. Yeah, it hurts now but my future self will be thanking me when I am older.

[@kennethwill246]

If they do need to barrow from the 401k. Just take a loan , the irs don't tax that unless u get fired or quit. The interest is very fair, at least for me