Saving Forward: Reap the Benefits of Roth IRAs

Credit reportA Roth IRA can be a valuable and flexible savings tool for retirement. You can get the biggest benefit if you let money in the account keep growing until retirement — you can withdraw earnings tax-free after age 59½, as long as you’ve had a Roth for at least five years. But you can also withdraw your contributions at any time without taxes or penalties, which can provide a backup emergency fund and ease the worry that you might need the money for something else.

You can contribute up to $6,000 to a Roth IRA in 2019 (or $7,000 if you’re 50 or older), as long as your income is below $122,000 if single or $193,000 if married filing jointly. (You can make a partial contribution if your income is less than $137,000 if single or $203,000 if married filing jointly.) Kids of any age who have a job also can contribute to a Roth IRA, giving them a huge head start on saving for the future.

Roth IRAs can help diversify your retirement savings, especially if a lot of your money is in tax-deferred accounts, by giving you a pot of money to tap without increasing your taxable income.

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