TLDW
1) Roth IRA Protects your investments from taxes for the rest of your life
2) As of 2021, you can contribute $6k per year
3) As of 2021, Income thresholds are $140k for individuals and $198k for Married filing jointly

Helpful Books
The Total Money Makeover:
The Simple Path to Wealth:
Selling Real Estate Without Paying Taxes:
Rich Dad Poor Dad:
Power of Habit:
7 Habits of Highly Effective People:

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0:00 – Intro
0:25 – Why Open a Roth IRA?
0:45 – Contribution Limits per year
1:03 – Income Phase-out
1:35 – When can you pull out your money

Open a Roth IRA:

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Roth IRA Explained In Under 5 Minutes

A Roth IRA, or Individual retirement account, is a popular retirement savings tool that offers unique tax advantages. Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax dollars, meaning that you won’t get a tax deduction for your contributions. However, the earnings and withdrawals from a Roth IRA are tax-free, making it an attractive option for many individuals.

Contributions to a Roth IRA can be made at any age as long as you have earned income, and there is no age limit for making contributions, unlike traditional IRAs which have an age limit for contributions. The annual contribution limit for a Roth IRA in 2021 is $6,000 for individuals under the age of 50, and $7,000 for those age 50 and older. This makes it a great option for individuals who want to continue saving for retirement even if they are no longer working.

One of the key benefits of a Roth IRA is the ability to withdraw your contributions at any time without penalties or taxes. This can be useful in case of emergencies or unexpected expenses. However, any earnings on your contributions can only be withdrawn tax-free and penalty-free once you reach age 59 ½ and have had the account open for at least five years.

Another advantage of a Roth IRA is that there are no required minimum distributions (RMDs) during the account owner’s lifetime, unlike traditional IRAs which require account holders to start taking distributions at age 72. This allows for greater flexibility in managing your retirement income and potentially passing on your account to heirs.

It’s important to note that there are income limits for contributing to a Roth IRA. In 2021, individuals with a modified adjusted gross income (MAGI) of more than $140,000 (or $208,000 for married couples filing jointly) are not eligible to contribute to a Roth IRA. However, there are ways to work around these income limits, such as making a backdoor Roth IRA contribution by making non-deductible contributions to a traditional IRA and then converting it to a Roth IRA.

Overall, a Roth IRA can be a valuable addition to a retirement savings strategy, offering tax-free growth and flexible withdrawal options. It’s important to consider your individual financial situation and future income needs when deciding whether to open a Roth IRA, but for many individuals, it can be a smart and beneficial choice for retirement planning. Talk to a financial advisor to see if a Roth IRA makes sense for you.