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Originally Posted by ArellaNova
*is still laughing over your location status*
awseome.
okay, so as far as I can understand the Roth is the way to go if I can afford to pay the taxes in my present budget. (which I think is doable)
What is the minimum yearly (or monthly) contribution? Any idea?
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Well, that is typically up to the firm with whom you invest. $500 sounds about right. It isn't a question of *whether you can afford to pay the taxes now*, you can't afford NOT to pay them now. Does the government deserve your $37,700 or you? Do you want to make an extra $10K or not? Frankly, it's a no brainer, simply a smaller initial investment. Taxes on $500 is lunch money. Ask yourself if two weeks of bologna sandwiches is worth $10,000 or not?
Now, let me tell you about the glories of early investment....
Lets suppose, at 21, you put $5000 a year in a Roth IRA for 8 years and then quit. Your buddy starts at 29 and puts $5000 a year in a Roth IRA every year for 32 years.
You put in $40,000 and he put in $160,000. When the 40 years is up, you will have more money than him!
Obviously, $5000 is a lot of money, but I use it to illustrate the point. So, invest as much as you can when you are young. It might hurt for 8 years, but it is the difference between being a Thousandaire and a Millionaire!
21. I wish I knew then what I know now.... ~mumbles about 21-year-olds and their damn rap music~