If you have earned income through employment for 2022, we highly encourage you to make a Roth IRA contribution for the year. Roths are our favorite opportunity because you can move money into tax-free buckets over time. The more tax-free funds you have, the smaller the piece that the government can take! Many people tend to wait until the end of the year to do this, but you risk forgetting about it during the holiday rush.
A Roth IRA is an IRA that, except as explained below, is subject to the rules that apply to a traditional IRA.
- You cannot deduct contributions to a Roth IRA.
- If you satisfy the requirements, qualified distributions are tax-free.
- You can make contributions to your Roth IRA as long as you have earned income.
- You can leave amounts in your Roth IRA as long as you live.
- The account or annuity must be designated as a Roth IRA when it is set up.
The same combined contribution limit applies to all of your Roth and traditional IRAs.
Not sure if you qualify?
The IRS table for income and contributions can be found here:
I often joke that everyone in the county should have a Roth and that I want to be known as "Mr. Roth". No matter your age, if you have an earned income, please consider a Roth. Taxes, in my opinion, are only going to go up, and I want clients to protect their hard-earned money as much as they can. In a volatile market, it's one of the best things you can do for your future.
Questions? Contact me, it's always free to talk. My website also has great resources on all things finance-related.