How much do you have saved for retirement? If you’re an employee, you probably have a 401(k) or other sponsored retirement plan, but you don’t have to stop there—there’s more to retirement savings. Depending on your annual income, there are different types of retirement vehicles. One that is often overlooked by many young professionals and self-employed entrepreneurs is the Roth IRA.
A Roth IRA is an individual retirement account that allows you to use after-tax dollars to fund life during retirement. The tax-free factor provides a tax-free stream of income (including gains) when you retire. It’s important to take advantage of this when you’re younger because this tax-free retirement vehicle is not available to you after you reach a certain income threshold.
The IRS also raised the annual Roth IRA contribution limits from $5,500 in 2018 to $6,000 in 2019 (for individuals under 50). That means you can contribute $6,000 to retirement this year and enjoy the benefits of tax-free withdrawals when you retire. If you contribute $500/month, you can max out your retirement account goals in 12 months. That adds up to a retirement savings goal of $125 a week! Below, are additional steps you can take to reach your retirement goals this year.