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Quick, How Do You Spell Rich?

by Jackie Beck

Picture this: You’re 16 and you’ve just gotten your first job. Or maybe you’re fresh out of college and are getting started in your chosen field. Or heck, maybe you’ve been working for a while. 

What do you all have in common?

Earned income — which means you’ve also got the potential to become rich.

So quick, how do you spell rich?

R-O-T-H.

A route to wealth

That right, a Roth IRA can make you very wealthy — IF you take advantage of it.

So what the heck is it?

Just a name for a special way to treat your retirement funds. Think of it as a “the government’s going to let me keep my money” fund. Or a “someday I could buy a few Ferraris with that” fund. Whatever appeals the most to you.

Here are the key advantages of saving for Ferraris retirement using a Roth. According to the IRS:

  • If you satisfy the requirements, qualified distributions are tax-free.
  • You can make contributions to your Roth IRA after you reach age 70 ½.
  • You can leave amounts in your Roth IRA as long as you live.

I added the bold, because hello, that’s what helps you end up with a ton of money. The others are real advantages too, but hard to fathom because they’re so far away.

The takeaway

If you don’t have a Roth, call up someplace like Zecco, see if you qualify, and start one today.  If you or your child who makes money are under 18, call up someplace like Scottrade instead, because they offer Roth IRAs for minors. Then send money to it regularly, and leave it there until you’re very, very rich.

Posted in Retirement on 03.27.12 with 14 comments.

14 Responses to “Quick, How Do You Spell Rich?”

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