If you have a Roth IRA you are on a good track to retirement financial success. Typically, you will have decided whether or not you have a fixed schedule of Roth IRA Contributions that you make over time. But what do you know about this money that you’re working hard for and then sending off to your Roth IRA? It’s crucial to know the purpose of your Roth IRA Contributions and what these payments mean to your future.
Why Roth IRA Contributions are important
Everyone worries about having enough money saved up for when they retire. One of the best ways to ensure a healthy retirement fund is through Roth IRA contributions. A Roth IRA is arguably the best type of retirement account in the United States due to the advantages that comes with it. Of those advantages, the most relevant is the compound interest that all accounts will have.
Compound interest takes place because you are leaving money in your account and accumulating more through low-risk investments, acting as a pseudo-interest on your account. This means that all the ‘interest’ that you gain over time, will also gain interest, leading to exponential capital gains in your account. Add this to the withdrawal tax rules on Roth IRA Contributions, and this type of account cannot be beat.
Where to make Roth IRA Contributions
These days the best place to set up and maintain Roth IRAs is online at any major broker. All major brokers (Scottrade, Merrill Edge, ETrade, Zecco, TradeKing) offer online services where you can easily see updated details about your account. When you log into your account you should be able to see past Roth IRA Contributions that you have made, the money that you have made through your account, and the fees you have paid to keep your account active(this varies between brokers, so if you haven’t set up an account yet, do your due diligence).
If you have any questions on your Roth IRA Contributions please leave a comment below.
More information about Roth IRA Contribution Limits on the homepage.