NOTE: In 2023, you can contribute a max of $6,500 toward a Roth IRA *or* a traditional IRA, in total, across both accounts. In other words, you cannot contribute $13,000 split evenly between both IRAs. In The Simple Path to Wealth by JL Collins, he suggests to start with maxing the Roth IRA first until your income eligibility requirements phase out. Then you can work on maxing out the traditional IRA.
My husband and I are wanting to open Roth IRAs. Can we each contribute 6500 to our own accounts or, because we file jointly, is it 6500 total? I can't find a clear answer on the IRS website and I don't want to open the accounts until I understand the contribution limits better 😬
Justine, I think you give absolutely fantastic advice. However, there is a tweak to this: the total contributions to Roth and traditional IRAs are $6500 this year. Ie - you can’t max out $6500 each (13k total) you can max out 6500 total (assuming under 50 years old)
Ahhh!! You are right! It is $6,500 total if you were to split the contributions between Roth and traditional. I did put in text to max out the traditional instead of the Roth on-screen, but perhaps that was confusing. Can you send me a timestamp of where you heard the mistake? I want to get that corrected ASAP. Thanks for posting this comment!
@@DebtFreeMillennials it’s around the 4 minute mark where you flip from talking Roth to Traditional IRA’s and it can be solved with a big “OR” 😁in between them
@@melaniesimmons4122 ugh the TH-cam editor won't let me add text or audio to clarify that point so I added a pinned comment and posted in the description box. Thanks again for bringing this to my attention. Definitely don't want to confuse anyone.
If you’re self-employed, please understand there are different pros/cons to a SEP IRA depending if you have an employee or not and if you want more deferral options. As a owner- only company, a soloK may be a better option so speak with a retirement specialist!
6:13 *_Back door_* Roth IRA available for those with income too high for *direct* contribution to Roth IRA. This generally better traditional IRA especially if have access to traditional 401(k).
With a Safe Withdrawal Rate (SWR) of 4% the probability of running out of money is still pretty high. If you wanna be more on the absolute safe side, aim for 3.5-3.75% SWR.
Wish this was feasible with the cost of daycare in Maryland. HELOC seems to be the only way to help with that, as well as praying for the next interest rate fall to refinance the debt into the mortgage.
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NOTE: In 2023, you can contribute a max of $6,500 toward a Roth IRA *or* a traditional IRA, in total, across both accounts. In other words, you cannot contribute $13,000 split evenly between both IRAs. In The Simple Path to Wealth by JL Collins, he suggests to start with maxing the Roth IRA first until your income eligibility requirements phase out. Then you can work on maxing out the traditional IRA.
My husband and I are wanting to open Roth IRAs. Can we each contribute 6500 to our own accounts or, because we file jointly, is it 6500 total? I can't find a clear answer on the IRS website and I don't want to open the accounts until I understand the contribution limits better 😬
7,500 max on the Roth IRA if you are 50 or older in 2023.
Justine, I think you give absolutely fantastic advice. However, there is a tweak to this: the total contributions to Roth and traditional IRAs are $6500 this year. Ie - you can’t max out $6500 each (13k total) you can max out 6500 total (assuming under 50 years old)
Ahhh!! You are right! It is $6,500 total if you were to split the contributions between Roth and traditional. I did put in text to max out the traditional instead of the Roth on-screen, but perhaps that was confusing. Can you send me a timestamp of where you heard the mistake? I want to get that corrected ASAP. Thanks for posting this comment!
@@DebtFreeMillennialsI think the timestamp is around 4:34
@@DebtFreeMillennials it’s around the 4 minute mark where you flip from talking Roth to Traditional IRA’s and it can be solved with a big “OR” 😁in between them
@@melaniesimmons4122 ugh the TH-cam editor won't let me add text or audio to clarify that point so I added a pinned comment and posted in the description box. Thanks again for bringing this to my attention. Definitely don't want to confuse anyone.
If you’re self-employed, please understand there are different pros/cons to a SEP IRA depending if you have an employee or not and if you want more deferral options. As a owner- only company, a soloK may be a better option so speak with a retirement specialist!
Thanks for the video! Very well explained! I wished I had someone to teach me this back in high school.
6:13 *_Back door_* Roth IRA available for those with income too high for *direct* contribution to Roth IRA. This generally better traditional IRA especially if have access to traditional 401(k).
Great information, Justine!!
With a Safe Withdrawal Rate (SWR) of 4% the probability of running out of money is still pretty high. If you wanna be more on the absolute safe side, aim for 3.5-3.75% SWR.
Wish this was feasible with the cost of daycare in Maryland. HELOC seems to be the only way to help with that, as well as praying for the next interest rate fall to refinance the debt into the mortgage.
You're using debt to pay for daycare???
@@Elizabeth-mt6bb not yet but might be