In this article, I give a crash course on individual retirement accounts. I compare Roth IRAs with Traditional IRAs with 401ks. I analyze the tax advantages of each of these retirement accounts and when you should use each based on their tax advantages. I also look at the contribution limits for different IRA retirement accounts, when you can pull your money from a Roth IRA both penalty and tax free. I point out that you can pull your principal out of your Roth IRA penalty and tax free at any time.
How much do you need to contribute to become an millionaire in your IRA savings by the time you are 65? I analyze what it would take to get to $1 million in retirement savings if you start at 20, 30, 40, 50 and 60 starting with $0 in savings.
I cover the order in which you should contribute to your IRA accounts starting with getting all of your employer’s match in your 401(k), then contributing to your IRA until you max it out and then contributing to your 401(k) until you reach its limit.
After reading this article, make sure you take action, open an IRA account whether Roth or Traditional and set up automatic contributions!