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Published On: Sat, Jan 27th, 2018

Building a Big Roth IRA

Saving money into your Roth IRA is a good idea for any worker at any age. It doesn’t matter if you are 22 and just out of college. In fact, that is the best time to save because it can give you a headstart of building a Roth IRA that will find years of retirement. The way that it works is the earlier you begin saving, the earlier that compound interest can begin to do the work for you. Make your money work for you.

photo Gerd Altmann via Pixabay

A Roth IRA is funded with after tax dollars, so you cannot deduct those contributions from your income in a given year. The good thing is that you can receive those withdrawals tax free at any time after 59 and a half. That is when you can start to withdraw funds without penalty.

The way to build those funds is by saving as much of your paycheck as possible. There is no substitute for proper money management. You want to be able to make as much money as possible and keep as much of it as possible. The way to do that is to build your career skills as a way to attract more income and create new time management skills in order to save money.

Saving money is usually about being willing to trade your time for saving a few bucks. It is more convenient to take out your dinner from the supermarket or the pizza place every night, but it is also way more expensive. If you spent time learning how to shop for and prepare good dinners, you would be happier and healthier. And more wealthy. That is one of the key parts of the money saving process.

You also need to be able to keep a budget. Business keep budgets and pay people a lot of money to keep an eye on those budgets, so they can know exactly how much money is going out and how much money is going in. That is valuable knowledge because it determines whether or not a business is going to succeed or fail. The same thing applies to a household. If you want to be a successful household, you want to be able to bring in more money then you send out each month. The way to keep track of that is with a monthly budget.

Monthly budgeting skills are not built in a day. They are built over time, forming habits that are repeatable and good for saving money. There is no such thing as a natural budgeter. You are not born with the ability to save money and budget effectively. These are learned skills that can be taught and absorbed. All it take is the right system and the time that is needed to build sustainable habits.

Research shows that habits can be built in just 30 days, If you take the time to do something every day for 30 days, you can turn it into a habit. There is no magic here. It is just consistent practice of smart ways to save money. And learning how to save money and put it away into a Roth IRA will give you a real boost in your retirement years.

Author: Justin Weinger

About the Author

- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

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