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What is a Roth IRA? This is a question I get asked a lot and one I enjoy helping others learn about because it can be one of the greatest wealth building tools you will find.

Being able to build wealth TAX FREE can be amazing over a long period of time.

In this video I discuss:

– What a Roth IRA is
– What the contribution limits are
– What income limits there are
– Backdoor Roth IRA option

Let me know down in the comments section below whether you own a Roth IRA or not.

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DISCLAIMER: Everything shared on this video is for educational & informational purposes ONLY. I am not a Financial Advisor, so please perform your own due diligence prior to investing. This video is not sponsored, some links are affiliate links and I may receive a small commission at no additional cost to you. Thank you for supporting my channel….(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

A Roth IRA is a retirement account that is funded with after-tax dollars. It offers several benefits, including tax-free growth and withdrawals in retirement and the ability to withdraw contributions penalty-free at any time. If you’re interested in starting a Roth IRA, here’s a step-by-step guide to get you started.

Step 1: Determine If a Roth IRA is Right for You

Before starting a Roth IRA, you need to evaluate whether it’s the right type of retirement account for your financial situation and goals. Some factors to consider include your income level, tax bracket, and the amount of time until retirement.

For example, if you’re in a high tax bracket now, contributing to a Roth IRA may not make sense because you’ll pay higher taxes on your contributions upfront. Also, if you have a traditional IRA, converting it to a Roth IRA may not be the best option if you don’t want to pay taxes on the conversion.

Step 2: Choose a Roth IRA Provider

There are many Roth IRA providers, including banks, brokerage firms, and robo-advisors. You’ll want to choose a provider that offers low fees and a good selection of investment options.

Some popular Roth IRA providers include Fidelity, Vanguard, and Charles Schwab. You can also look into robo-advisors like Betterment or Wealthfront, which offer automated investing services for a lower fee.

Step 3: Open a Roth IRA Account

Once you’ve chosen a provider, you’ll need to open a Roth IRA account. This usually involves filling out an online application and providing personal and financial information, such as your name, address, Social Security number, and employment and income information.

Step 4: Fund Your Roth IRA

To fund your Roth IRA, you’ll need to contribute money from your bank account. You can make a one-time contribution or set up automatic contributions to occur at regular intervals, such as weekly or monthly.

The maximum amount you can contribute to a Roth IRA in 2021 is $6,000, or $7,000 if you’re age 50 or older. Keep in mind that there are income limits that determine how much you can contribute to a Roth IRA, so make sure to check the current limits before contributing.

Step 5: Choose Your Investments

Once you’ve funded your Roth IRA account, you’ll need to choose your investments. This can include stocks, bonds, mutual funds, ETFs, and other investments. The goal is to create a diversified portfolio that aligns with your risk tolerance and investment goals.

If you’re not sure how to choose your investments, consider speaking with a financial advisor or using a robo-advisor that can offer automated investment recommendations.

Step 6: Monitor Your Roth IRA

After you’ve set up your Roth IRA account and made your initial investment, it’s important to monitor your account regularly. Keep an eye on your investment performance and make adjustments as needed to ensure that your portfolio remains aligned with your goals.

In summary, starting a Roth IRA is a straightforward process that involves choosing a provider, opening an account, funding your account, choosing your investments, and monitoring your account regularly. By following these steps, you’ll be on your way to building a tax-free retirement nest egg.