Roth IRA Explained in 60 Seconds (2023 Rules)
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- เผยแพร่เมื่อ 24 พ.ค. 2023
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Recently retired and unsure if my 401(k) and IRA will provide a stable future. i need an approach that will align with my risk tolerance and financial goals, i set aside $1m to achieve this. Do you suggest i get into stocks or buy a rental property?
Look up dividend aristocrats. Pick six to ten from that list. Those companies have a track record of 25+ years of paying dividends. Also, its advisable you work with a financial advisor to help set up a well-structured portfolio.
I agree. Based on personal experience working with a financial advisor, I currently have $2 million in a well-diversified portfolio that has experienced exponential growth from when i started. It's not only about having money to invest, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Sonya lee Mitchell is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I looked up her full name online and found her page. I emailed and made an appointment to talk with her; hopefully, she gets back to me.
Investing in Roth IRA can be a good choice since they are funded with after tax dollars, your contributions can grow tax-free over time. When you withdraw money from your Roth IRA in retirement, you won’t have to pay tax on it, which will help you keep more of your hard-earned money. I retired with 5 million dollars
If you’re new to investing or have a more complex financial situation, It can be helpful to work with a financial advisor who can provide personalized guidance and help you make informed investment decisions.
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $150k since then
Due to the market falls, I need advice on how to rebuild my portfolio and develop more successful tactics. Where can I find this teacher?
Finding financial advisors like Sharon Lee Peoples who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I searched for her name on the internet, found her page, and reached out via email to schedule a conversation. Thank you.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
consider financial advisory so you don’t keep switching it up... those sound like great picks anyways, not bad for 350k
Agreed, I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has 5X in barely 5 years, summing up nearly $1m as of today.
@@StephenTho42 this is huge! would you mind revealing info of your advisor here please? in dire need of portfolio rebalancing
She goes by ''Katherine Nance Dietz'' a renowned figure in the financial industry with over two decades of experience. I'd suggest you research her further on the internet.
thanks for putting this out, curiously inputted Katherine Nance Dietz on the web, and spotted her consulting page no sweat.. was able to schedule a call session with her, she actually shows a great deal of expertise
*half the video*
"Makes perfect sense"
*Phased out Contribution Calculator*
"😵💫"
The Roth IRA explained
*makes it even more confusing*
literally lol
Terribly fast and not explained at all, let alone well
Bruh, I'm just dying poor.
You missed explaining the back door roth for a way to contribute if you’re over the income limit.
I need to know this because I'm 6 months away from being over 238k
@@thejakelegion contribute to a traditional ira then do a roth conversion from trad to roth thats a fancy way to say move funds from tradition to roth
Yeah. I still don't understand.
Why? It could not be any easier 😂
it says there is a limit each year which is 6500 if you are below 50 if you are above it is 7500. And what roth is after tax. So you put your money into an account with the money you already paid tax off of and it grows tax free which means after the age of 59 and half you can retrieve that money without paying tax for it. If you take it before 59 then you have to pay 10% fee which sucks so put your money into it and forget about it for a long time especially if you are 20 or something because it will take about 40 years for you to eat fruits of the money you put. But it might be advantageous because if you are in the lower tax breackate right now and you believe you will earn more money or government will increase taxes by the time you are 60 then it is very worth it since with a regular ira and 401k you will pay taxes when you retrieve your money. Hope this makes it easier.
It’s compound interest it’s hard for human minds to comprehend but it works
@@yavuz9038it’s more than just a 10% fee though what you take out also gets taxed as income double whammy
What part don’t you understand?
“You can’t have one, you make too much money”
Life always has to have ways of keeping you down. Smh
I'm 55 and semi-retired with IRA sitting in cash, but not impressed with growth so far. Please, how can I take advantage of the current market to make gross profits and retire comfortably rich? Heard of folks that turned millionaires in shaky times like this
depends how much is 'comfortably rich' if you pinpoint a particular amount to retire with, then it's ideal to plan with a trusted advisor
I see no other way to maneuver steady profit and steer off losses in this current market except by expertise assistance, would you mind connecting mw with your advisr please? i'm in dire need of proper asset allocation
thanks for the hint, just inputted Katherine Nance Dietz on my browser and found her consulting page, no sweat.. she seems valid
Try learning how to day trade maybe. It can be super risky but if you are retired and have free time to learn a new skill maybe day tradings the move
You have to make sure once your money is in the Roth IRA that you are actively investing it. About 30% of people put money into Roth IRAs thinking that is all you have to do. If you don’t actively choose a stock, index fund, ETF etc., then the money literally sits there and does nothing. Pick top stocks which are in the S&P 500 index such as Apple, Microsoft, Cosco, etc. Or put the money into an S&P 500 Index fund. Your money will grow really well by making sure you invest it and then at 59 1/2 years of age, no taxes ever on the money in the Roth account.
Thanks
Is this what they mean when they say “start investing”??? Like in those big name companies ?
@@phorqueselantro3566 Yes
I mean yeah, some people are retarded..
Wait, so the money in the Roth is being funneled into something like the S&P instead of directly investing in the S&P?
Opening a Roth IRA account is such a fundamental step on the path to financial success. It's not just about storing your money; it's about making your money work for you. wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made
What do/did you do for a living?
You sound like a copy and pasted Dave ad. Maybe even Caleb hammer. Lmao
Saw the exact same comment on other financial videos. Sound like an ad
Why are IRA contribution limits kept so LOW ($6K/$7K)? They should be made the SAME as 401k limits so that folks without a 401K can be on equal footing! Somehow this video has helped shed light on some things cos I'm aiming to create a portfolio worth not less than $1M before I turn 60.
For many years, bonds or other fixed-income assets could produce the yield needed to provide solid income for retirement needs.The importance of having financial safety could be why retirees are turning towards advisors in retirement planning
True, proper asset allocation is critical. Furthermore, some fund mangers employ hedging strategies or devote a portion of their portfolio to defensive assets that perform well during market downturns. Individuals who rely on pensions should understand their funds investment strategies. Having an advisor assisted me in garnering up to $3 million for retirement.
This conversation makes me realize how important it is to monitor the financial health of pension plans and understand how they're invested. It's not something we should take for granted. Please who is the advisor that guides you?
Just open a brokerage account. It’s like Roth where you’ll pay the taxes now, no limits on contributions, no limits on when you can withdraw the money and it’s not taxed at ordinary income like a traditional 401k/ira is. You’re only taxed at capital gains rates. It’s not as good as a Roth 401k but there are advantages to it too.
Because they want u to be a slave to a company
What if you make less that those limits ?
You can contribute the full limit ($6500).
This makes sense
@@justanotherweirdo11thank you
@wealthhacker Please do a quickie on HSA.
Those limits are so low, I honestly feel it's intentional, to hinder any significant compound growth and dividend receivables.
ok i thought it was just me, doesn't sound smart long term
The money you put in when you're young and make less than that still grows tax free
Ron Legrand has a video out saying taking $100 from a Roth IRA to put into a wholesale deal and if you made 20,000 profit from that deal the 20k goes back into the Roth IRA tax free now and later at 59.5....can you explain this ?
Perfect short, thanks.
I dont understand the phased out contribution part
So..if your 65 & start a business that you've turned into an S-corp thus giving you a paycheck..now how does this work?
Thanks for simplifying for us Canadians
Thanks for the information,
You're welcome
What about if you make less than that income?
Backdoor Roth contributions bypass income restrictions.
It's based on adjusted gross income, not salary. You didn't mention that
My salary would limit my contribution, but (based on the IRS website calculator) because of my AGI, I can contribute the full $6.5k
Can you write off losses? Im down 5k on a company and want to get out of it completely
so the taxed contribution takes half of what you put in? and what’s left is invested?
Where did the $15k number come from? Did you call it a rate or a range?
I’d be retiring or working less in 5 years, and considering this financial recession, I’m curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $250K per year but nothing to show for it yet
Do you have a 401k? you should contribute to your retirement diligently, or better still look into financial planning
Very true, I find myself lucky enough exposed to money management at an early age. Worked full time when I was 19, purchased first home at 28, fast forward time... I'm 50 now, got laid off March 2020 amidst lockdown, a blessing in disguise. At once, I consulted an advisor to stay afloat and with subsequent investments, I'm only 15% short of $1m as of today.
@@benalfredo this is huge! would love to grow my reserve regardless of the economy situation, my 401k has lost everything accrued since early 2019, at this point, i'm in need of guidance, can you point me?
@@benalfredo thanks for info! curiously copied and pasted her full name on my browser, spotted her page easily, she actually looks very distinguished
I saw this exact comment by a different person in the same format lol. what's happening
What if you were previously making 120k, now all of the sudden you’re making 200k. Can you still contribute, or will the money you already put in just continue to sit there, or do you have to take it out and possibly switch to a Traditional IRA?
No you don’t have to take out money you contributed previously. Just can’t contribute more, once your annual income exceeds the limit
What happens if I do end up making more than the allowed annual income
What if you are below the amount the recommended amount
Do you have to keep paying every year?
Hi
Do I have to invest it or just deposit the money and just leave it there like that and let it grow?
I been wondering the same thing this whole time.
You have to Invest it ( Stocks/ETFs/Index Funds) Best thing is to invest in Index funds.
When is the best time of year to invest in your Roth? If I want to contribute all at once.
How and when they determine how much I make if I can start contributing in January ? I’m asking since my salary went up and I feel I can get stopped from contributing so would like to understand when I will be stopped since I haven’t filled the taxes for 2023 saying I make more than 153K. Thanks
What if you have one and later on in life start making more than that? Do I have to wait until I'm 60 to touch that money even though I can't contribute anymore? Or can I then rollover into something else?
So do I let the money sit? Or do I invest what is in my ROTH IRA?
I guess the part that I’m unsure about is tax deferred. Is the tax deferred or will I not have to pay tax at all later? When I start making withdrawals after 59 1/2, will I have to pay tax?
If you make over the limit look up backdoor Roth IRA pretty simple to do.
What happens if I paid off my contributions last year but this year I make over 200k a year? Should I switch to rollover or traditional IRA?
Backdoor Roth???
Yeah that's dirty!
Awesome info thanks
No problem!
What's the 5year rule, I thought u can take out without tax penalties
Where did the 15k come from?
What's the income minimum?
Is that pre or post tax income?
Question, what happens if I qualify for a Roth IRA now but later in life I exceed the threshold? Am I forced to withdraw my funds or just forced to stop investing into the Roth?
Your money grows tax free, not tax deferred. You already paid the tax, there's nothing to defer.
What if it is February, married filing jointly, and you are not sure if your combined income is over or under that limit? My husband never really knows for sure what he’s going to make for any given year until the end of December. His boss pays a chunk of salary in a bonus in December each year and there is no formula for it. It is at the company owner’s whim.
You have until April 15th to make a contribution for the previous year. So you have a short window to figure out how much you made and made a contribution.
You can have traditional and still save its the same thing. If you know when taxes go up when its announced then you just move the money into something else or take it out early before the taxes go up and save that way.
If I currently make less than those limits but one day come to make more what will happen to my money that I had in the Roth IRA?
I want to know as well, I was thinking the exact thing
@@wilsonstrickland4888u can’t add more money if that happens but the money stays
it stays in there you just cannot make a roth contribution for years where your income exceeds the limit
That's great. What if I only make 40k a year?
If you are single and above the limit, could you, in theory, open up a Roth IRA, Max out your 401k either traditional or Roth to lower your taxable income, make after tax contributions and then invest in your ROTH IRA?
If you understand it, it’s not so overwhelming. Start young and ride the wave :) good video ty
Good stuff
There’s a way you can bypass not being about to contribute if you make “too much” money.
Is that AGI max amounts?
Duly noted.
Can we trade in Roth IRA
Why did you divide the 7k by 15k ? Where did the 15k come into the equation ?
Nvm I watched someone else’s video and I understood from them instead
@@joeartgarrido007what video did you watch to understand it more ?
1)As a single tax filer, if I make $200k short term capital gains(investment income), no job, can I use that to fund a Roth IRA account???
2) Or if I have a job making $40k a year (earned income) and make $200k on short term capital gains (investment income), will it affect my qualifications to open up a Roth IRA???
@@ChefJeff003 that is very informative, the reason I asked about it because of MAGI (Modified Adjusted Gross Income) will affect the eligibility to fund the Roth in my understanding. Let’s say, $40k earned income and $200k on investment income. The total MAGI will be $240k. In summary, MAGI determines the eligibility to make contributions to Roth IRA????
What if ur under the income limit as a single person or married person?
If I don’t make 138 to 158 or whatever now but will in the future do i just still have the ACC and just can’t add or will i have to get rid of it?
Once your income is too high to *directly* contribute to Roth IRA, you may *indirectly* contribute to Roth IRA by *_back door_* Roth IRA process.
i in europe i make less than 10k *sad* how can i save money
The income limits are based on AGI (Adjusted Gross Income)
So the amount your allowed to put in is based off your income? So if I’m 23 making 125K a year I can’t put 6,000? Or do I have to use the formula presented in the video? Sorry I am not the best at math 😅
Does VA disability count toward total income when calculating what you can contribute
No
Short video I get it, big ones missed is Backdoor Roth for high income earners and contributions are tax/penalty free after 5 years
So, if your paycheck reflects your contribution, that money shows that was put in is after tax which means you already paid taxes on it? Reason I ask is because this seemingly replaced where I contribute fed tax on my paycheck.
Maybe contact HR or your payroll clerk and ask how to contribute to your 401k pretax.
You can do backdoor Roth
It has to be earned income and it has to be in the account for 5 yrs before you can withdrawal it.
What if you make less than the amounts provided?
Then you’re good, you can’t make more than the limit but you can make under the limit
Thank you! I was worried.
What’s the 15k part??
Did you get it???? 😅
I have the same question
What if you are below those 2 income limits? He said if you're above them then you can do it, but what about if you're below those minimums?
He literally said the opposite.
Then your good
Then, you can always backdoor roth contributions if you hit over the income limit.
Not sure if I'm thinking correctly but it sounds like to me only a certain amount class person can start a Roth. Why not everybody? I don't have alot of money so I get skeptical. Maybe it's because banks take your saved money and invented. I could wrong just what make the best choice.
If you have income you can open a roth. If you made $1 per year (after tax) you could contribute $1.
I made a couple hundred at 17 and put it into a roth. It's not much but it's worth like 80x its value in 40 years
You said the money grows tax deferred to me that means you have to pay taxes later like in a traditional IRA but in a ROTH the money grows tax free?
The best is when you can contibute to a Roth IRA and still get a Saver's Credit 😍 Well, actually, making more money would be better... but that is a nice bonus.
What if when you start it off you make under the amount but later in life you get a job that pays over the amount ?
it goes year by year. as long as you made less than the amount you could contribute the maximum. once you hit that range, you can only do a portion of the yearly Roth maximum. it doesn't affect the money that's already in there.
A Roth IRA wouldn't be "Tax deferred,"
It would be be tax preferred.
Roth and traditional IRAs are both tax PREferred vehicles,
But only traditional ones are DEferred.
Deferred means "later"
Is this sped up or can you talk that quickly? May have career opportunity as auctioneer
Haha! Had to speed ramp this one to get under 60 seconds 😂
what if I put too much money in the Roth IRA? How do I avoid the tax penalty?
You can take it out
You do not know the backdoor method, you can make as much as you can over the limit and still do roth ira. Look up mark j kohler, backdoor roth
Does this mean you pay taxes on the Roth IRA every year?
MFJ is ≥ $218,000 but < $228,000 for phased out contribution, isn't it?
What if you make way less then that
Money is dumb, gain love. Love is wealth. Everything else is noise.
People who make too much to do Roth IRA should talk to a CPA about doing Mega Roth IRA/Mega Backdoor Roth IRA.
As long as you are under the max limits you can contribute the full amount what are you talking about ?
What if you make less than $138k? What do you suggest?!
you can still do a roth
I thought roth didn’t have a minimum contribution
You forgot backdoor contrabutions.
I had 60 seconds
@@wealthhacker Touché 😏
Do backdoor Roth
🤔🤔🤯
Seriously, good stuff even if mind spinning math involved.
I'm more confused than when I started
Couple things wrong. It’s the year you turn 50 so if your birthday is 12/31/1973 this year you are turning 50, but you’re 49 for most of the year. This doesn’t matter though it is that year in which you turn 50 that you can start taking catch up contributions (the extra 1000 in the IRA and also into the 401k)
You also can contribute the full 6500 or 7500 into the Roth it’s called a conversion or back door funding.
Do some research into “Back Door Roth IRA”. No income limits.
No income limits. Potential large tax bill
If i made over 150K. and I didn't know the rules of limitations. I already put 6500. What I need to do😢
Talk to your IRA custodian. And they’ll help you take it out.
Why are we dividing by 15K?
Because that is the range between 138k and 153k I think.
I thought this would make it simple to understand..i was wrong