Step-by-Step Guide to Creating a Roth IRA Retirement Account

💡A Roth IRA is a retirement savings account that allows you to invest post-tax money and enjoy tax-free gains in the future.

📈Starting a Roth IRA early can lead to significant wealth accumulation, with the potential to become a millionaire by retirement age.

💸As of 2021, the maximum annual contribution for a Roth IRA is $6,000 ($7,000 for those aged 50 or older). Contributions can be made until April 15th of the following year.

📱M1 Finance is a user-friendly platform for opening a Roth IRA account, offering no fees, easy account creation, and a great interface on both desktop and mobile.

🔒Withdrawing contributions from a Roth IRA is penalty-free, but withdrawing earnings before age 59 ½ may result in a 10% penalty fee and taxes.

Who qualifies for a Roth IRA?

—Individuals with income below certain limits, such as $125,000 for single filers and $198,000 for married filers, can contribute the full amount. Contributions are prorated for those with higher incomes.

Can I contribute to both a Roth IRA and a traditional IRA?

—Yes, you can contribute to both types of IRAs, but the total contribution limit across both accounts is $6,000 ($7,000 for those aged 50 or older).

Is there a deadline for contributing to a Roth IRA?

—Yes, you have until April 15th of the following year to contribute for the previous tax year. For example, you can contribute until April 15th, 2022, for the 2021 tax year.

Can I withdraw money from my Roth IRA before retirement age?

—You can withdraw your contributions at any time without penalty. However, withdrawing earnings before age 59 ½ may result in a 10% penalty fee and taxes.

Can I have multiple Roth IRA accounts?

—Yes, you can have multiple Roth IRA accounts, but there is an overall contribution limit of $6,000 ($7,000 for those aged 50 or older) per tax year.

00:00Introduction to the importance of creating a Roth IRA retirement account.

02:24Explanation of what a Roth IRA is and its benefits.

06:44Overview of eligibility and contribution limits for a Roth IRA.

09:56Step-by-step guide to opening a Roth IRA account with M1 Finance.

13:42Overview of the investment options within a Roth IRA.

16:10Discussion on the tax benefits and withdrawal rules of a Roth IRA.

17:54Answering common questions about Roth IRA eligibility, contributions, deadlines, withdrawals, and multiple accounts.

20:05Conclusion and encouragement to take action to create a Roth IRA and secure a financially stable retirement.