How to Open a Roth IRA

Plenty of various options will help you save up for your retirement, and one of the best ones is the Roth IRA, or ?individual retirement account.? Opening up one of these is an extremely smart and solid investment, especially if you?re a young person looking to set yourself up with some nice-looking retirement funds later on in life.

What exactly makes the Roth IRA so attractive? Well, for one thing, it grows your money. This is what any investment fund does, but the Roth IRA does it tax-free, which is a very good thing no matter what. Even more attractive is the flexibility that you get with a Roth IRA ? something you might not get from a 401(k) or one of the similar retirement plans that an employer might offer.

With a 401(k), you make contributions to your retirement fund and your employer matches. This money is saved for your retirement however, and that?s that. With a Roth IRA, on the other hand, you?re allowed a little more leeway with how and when you use your money. You can pull money out for emergencies and other types of situations where you might really find yourself needing some assistance. If you?re looking at a new home or need some funds to put your kids through school, you can also dip into your Roth IRA for these purposes, as well. These options aren?t available with other retirement funds, like the 401(k).

Most importantly, you want to make sure your investments are smartly prioritized. Think about the differences between your Roth IRA and a 401(k) that you might have available at work. If your employer matches your 401(k) contributions, it might really be a smart idea to go with this option first. Then you can put that money into a Roth IRA once you?ve left that job or at a later time, and that money will continue to grow, free from the burden of taxation.

If you go with the Roth IRA, you have a few different ways that you can invest. Stocks are one of the best options for younger individuals that don?t have quite as much experience. A broker can get this all put in place for you, and your stocks will continue to earn money for your retirement over the years. Your other options include mutual funds, bonds, or real estate, with mutual funds being another solid option for the inexperienced investor.

There are tons of ways to set yourself up for the best possible retirement, and the Roth IRA is arguably one of the smartest methods for doing so. You can go with one of many self directed Roth IRA investment options, involving either saving up or setting up an automatic withdrawal system that pulls out of your checking account on a regular basis. No matter what you decide, your Roth IRA will have you saving great money for retirement so that your golden years are some of the very best years of your life.

Source: http://www.everydayhowto.net/personal-finance/how-to-open-a-roth-ira/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-open-a-roth-ira

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