ArticleDay 17: Tackle Retirement Accounts In Fi...
So, you have a sense for the differences between the retirement vehicles, but which one is right for you? Roll up your sleeves – it is time to get serious about your financial future!
Learn:
Let’s talk about your options:
1. If your employer offers a 401(k) matching plan, enroll! Contribute as much as you can (up to the $16,500 limit) to get your full matching benefits. If your company does not match and you can save more than the $5000 IRA contribution limit, you should definitely still contribute to your 401(k)!
2. If your company doesn’t sponsor a 401(k) and you make less than $105,000 a year, we want you to open a Roth IRA. Even if you can only spare $50 to contribute, doing this is a game-changer for your financial future! If you make more than $105,000, open a Traditional IRA and know that the government will allow you to roll this over into a Roth IRA. Don’t worry about this today.
The chart below should help you understand why a Roth IRA makes more sense for you than a Traditional IRA if you qualify:
Let’s say you are 25 years old and aiming to retire at 65. Like a good LearnVester you contribute to your IRA every year from the age of 25 to 65. The below is how Traditional and Roth IRAs will differ when you retire.
| 3. If you contribute the max of $5,000 to your IRA and still have money to save for retirement (i.e. your Emergency Savings fund is in tact), then—even if you don’t receive employer matching—you can focus on maxing out your 401(k) at $16,500! |
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If you don’t receive employer 401(k) matching, we are going to have you open an IRA right now! Aside from making sure you pay your bills on time, this is the single most important thing you can do for your financial future!
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| Don’t stop now! You can do it! If you don’t yet have a retirement account, you need one to secure your financial future! If you want to be walked through the process in greater detail, check out the LearnVest checklist "I Want To Open An IRA". Still feel overwhelmed? E-mail us at feedback@learnvest.com and we will help walk you through the process. |
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Understand whether you qualify for a Roth IRA by evaluating all of your income. If you make less than $105,000/year—you qualify! 
3. If an IRA is best for you, choose a brokerage account for your IRA—Roth or Traditional. If you need to build your savings over time and are not in a position to open your account with a lump sum, check out 
Sign up online. Make sure to set up online statements.
Link your bank account, if possible. Many online brokerage accounts allow you to associate a savings or checking account for easy transfers. We want you to do this so that you can make a contribution to your IRA with as little drama as possible. The brokerage will probably make small deposits into your bank account within a few days, and you will have to identify the deposits to verify that the account is really yours.
Once your account is cleared, make your first deposit!! Even if you can only afford to contribute $50 today, put in something to get yourself started.Want to receive Financial Resolution Bootcamp in your inbox?
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biggest stress about money....not having a job