My Friend Roth

A Roth IRA is for me.  And you.

I have been reading about Roth IRAs since my days of working at a bank, and I meant to open one then.  It's one of those things that can easily get away from you.  I'm telling you that right now is the time.  It's a breeze.  Please bear with me in this post; I only share what I feel is valuable information.  Wink!

Starting my own was part of getting my financial house in order over the weekend.  The gist is this: you save money for your retirement, and this is money that has already been taxed.  Ideally, you would want to practice that whole out-of-sight-out-of-mind thing, but if you do need to access it, you can always take what you deposited (not the earnings) tax-free.  There are fewer rules than with a traditional IRA, and you can access the money at a younger age (59 1/2).  You can also pull up to $10,000 for the purchase of your first house.  Bonus!

Consider this as well: taxes will most likely be higher when you and I retire because, much like the mercury in a Tennessee summer, they rarely go down.  Also, you could make bank and be in a higher tax bracket when you retire.  Good for Uncle Sam, bad for you.

The current maximum amount for the year of 2011 is $5,000.  You can open one at places like Fidelity, Charles Schwab, and Vanguard.  Depending on which place you choose, you can generally start small and work up to the maximum amount if you are so inclined.  Remember that if your company offers a match for their 401(k), you'd want to contribute first to that account, at least up to the amount that they will match.  That is what's called free money, which is a rarity in this day and age.

If you're interested, there's a lot more information here and here.  Someone once said that you should pay yourself first, and I definitely agree.