Why You Should Invest in a Roth IRA

Kelei Chatman
Sep 19, 2022
2 min read

Updated: Sep 19, 2022

In today's world, it seems we are much more intentionally with our daily habits. Your daily habits will reflect your future. Investing can be a very simple strategy to preparing for your future. A Roth IRA is an individual retirement account that allows your money to grow and compound over the years.

Did you know over 50% of Americans say they do not have a retirement account? - 2020

At what age do you want to retire? 50, 60, 70? I'm almost certain you do not want to be working until the day you die. Today is a great day to start preparing for your future.

Benefits of a Roth IRA:

Tax free: your money grows tax free.
Anyone with earned income can invest in a Roth IRA
Maximum yearly contribution is $6,000. For those 50+ and older, you are allowed to contribute a maximum of $7,000 per year.
No Required Minimum Distribution.
Tax free & penalty free after the age of 59 1/2

This investment account is not tied to an employer. Therefore it allows more flexibility than your employers 401k. This flexibility will allow you to contribute your investment accounts even if you become unemployed or decide to transfer jobs.

You should never leave your retirement funds with your employer. With an IRA, you can transfer your funds into an account tax free in most circumstances.

How can I start investing in a Roth IRA???

It really is simple.

Open a brokerage account ex. Fidelity, Invesco, Vanguard.
Choose an amount that you want to invest. You can make a one time contribution of $6,000, or monthly payments of which ever your budget allows.
Choose your investments. An IRA generally allows a larger pick of investment options.
Contact a financial advisor and improve your financial literacy. The most important way to obtain wealth is through knowledge. The best way to control your money is by making informed decisions, and learning how money works.

Hypothetical Illustration: An individual at the age of 29 who maxes out her IRA every year over the course for 30 years, will be a millionaire.

Beginning Contribution: $6,000

Duration : 30 years

Contribution: $500 per month

Rate of Return: 9%

Interests: $824,620

Total Contribution: $180,000

End balance: $1,010,620

(This is assuming a 9% return on investment, which does not predict future fund performance)

I hope this information helps! Feel free to contact me for additional information regarding your Roth IRA and/or retirement planning!!!

Kelei Chatman RN, BSN

Licensed Investment Advisor Representative