How Can I Make Good Decisions with My Money?

You know the importance of participating in a company 401(k) matching program, but retirement is more expensive than ever before, and one account alone probably won’t be enough. The more you save today, the better off you will be in the future. However, not all retirement savings plans are created equal. There are important tax implications that could impact your future, so it is wise to know how to make good decisions with your money.

“Work Family balance makes everyone more pleasant to be around and it feels great if you have a little nest egg growing to support your future. Enjoy the possibility of a Roth IRA!” says Sharon Tsao, CMO, Contemporary Staffing Solutions.

Consider A Roth IRA

A Roth IRA is a retirement account that has some strict eligibility requirements and annual savings limits, but also comes with some important tax advantages. You contribute to a Roth IRA with post-tax dollars, and over time, it grows in the account tax-free.

Roth IRAs come in many forms. The accounts may be simple savings accounts from a bank or credit union, or they might be investments made through a brokerage account. If you open an IRA through a brokerage, you can select investment options based on your age, income and risk tolerance. Options typically include stocks, bonds, mutual funds, etc.

The Benefits of a Roth IRA

There are numerous benefits to a Roth IRA, including:

  • Fairly high annual contribution limits.
  • At age 50, the limits increase so you can begin to make catch-up contributions if you feel you haven’t saved quite enough.
  • It will not impact your ability to invest in a 401(k).
  • You can pass a Roth IRA on to your heirs.
  • The tax rate you pay when you contribute is “locked in,” which means you won’t be taxed more as tax rates increase or your earning power increases.
  • If you have children, you can also use your Roth IRA funds to pay for qualified college expenses without receiving a penalty.
  • At age 59 ½, as long as you’ve had the account for five years, you can begin to take distributions without paying federal income tax.

Investing in a Roth IRA just makes good financial sense. It can supplement your 401(k) savings, and if you do not have a 401(k) plan, it is even more critical to invest in a Roth IRA and start building your retirement savings early.

The Limitations of Roth IRAs

Unfortunately, not everyone is eligible for a Roth IRA. Because of their significant tax benefits, they are not available for high-income earners. Limits change as regulations change, but the eligibility limit is currently $120,000 annual income for individuals and $189,000 annual income for married couples who file joint tax returns.

A Great Job is The First Step to Saving

Many young people believe that saving for retirement is a luxury they can’t afford, but taking advantage of Roth IRA benefits now will have a positive impact on your future.  If you are looking for a new job that will put you in a position to save money, contact the team at Contemporary Staffing Solutions today. We can connect you with a position that will help you achieve your career goals.

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Contemporary Staffing connects job seekers to hiring managers nationally in the following professions: Accounting & FinanceCall Center & OfficeHuman ResourcesITSalesforce, and Sales & Marketing.