When you start your working life, you need to set your priorities early. Many people want a large salary and a lot of time on the weekends to go out to clubs and party with their friends. They are not thinking about saving for retirement. But, when you start a Roth IRA at 22 instead of 32, you are getting a serious jump on the people that are thinking about partying. And if you can manage to fund that Roth IRA throughout your 20s, you can really make yourself a nice little nest egg for when you are done working.
Don’t Wait To Start A Roth IRA
The Roth IRA is a great way to save for retirement because you are paying Uncle Sam now, which means you don’t have to worry about paying the government again when you are ready to retire. The Roth IRA distributions that you take in your 60s and 70s should be tax free.
Fund Your Roth IRA Religiously
Don’t miss a payment. You need to make saving for your Roth IRA a priority every month. The more money you put in, the more money you will make when you retire. The compound interest is that much better if you are putting money in on the regular.
Figure out a way to keep saving money in your budget when you are trying to fund a Roth IRA. Look for free or cheap entertainment, instead of trying go out for dinner and a movie every weekend. Cook for yourself and you will find ways to really stretch a dollar.
Don’t Use Your Roth IRA as an Emergency Fund
Let’s say that your drop $10,000 in your Roth IRA at 27 years old after coming into a nice bonus at work. You just let it sit and you watch it grow at about 7% per year. When you get to age 65 you could be look at a little more than $130,000. But let’s say you had to take out your initial contribution when you were 32, because you had a plumbing emergency and your whole first floor was flooded by a leaky pipe? You would have way less than that.
Look for Other Ways to Make Money
Beyond the traditional cubicle job, there are lots of ways to make money and really get ahead in this world. If you are looking for a way to fund your Roth IRA, think about investing or day trading on the side. If you can muster up a decent amount of starting cash, you should take some time to learn how to do it properly.
Day trading seems risky, but if you go to the correct day trading education sites, you can really learn how to manage the risk and stay ahead of the game. Not all day traders make money, but the ones that do we’re able to learn the business without losing their shirts. Getting a day trading education can put you ahead of the pack of marks that are filling up the market these days.
Learn how to spot stocks properly and look for trends that will result in profits. There is no better way to do it.