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Money

January 03, 2021

Investing

Roth IRA

  • What is a Roth IRA (Individual Retirement Account)?

    • Money is added after tax is taken out
    • Deposits are not tax deductible
    • Withdrawals are tax-free, once certain conditions are met
    • Can only contribute if you make less than $140,000 per year for a single person(rate is likely to change in the future)
    • Withdrawals are tax-free and penalty free after you are 59 1/2 years old, and it has been 5+ years since your first funding contribution to your Roth IRA.
    • You can withdraw contributions without penalty or tax, but any gains will be taxed and possibly penalized if you don't meet the previous rules.
    • REMEMBER:
    • Name beneficiaries
    • Don't withdraw too early
    • You can't contribute if you make too much money

REFERENCE: Investopedia

Simple Path to Wealth

  • Stocks: Total Stock Market Index Fund - at roughly 50% of your net worth
  • Bonds: Total Bond Market Index Fund - at 40ish% of your net worth
  • Cash - for the rest.
  • You can fine tune your investments: For safer, longer term investing; increase the percentage in your bond fund.

REFERENCE: JLC Stock Series

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