Establish a Roth IRA 

It is never too late to start but starting early is best!

A Roth IRA offers a unique combination of tax advantages and flexibility, making it an excellent choice for young savers.  If one understands and takes full advantage of the power of a Roth IRA early, they could be a millionaire by age 65.  There is still time to contribute for 2024.

Three Key Benefits

Tax-free growth

• Roth IRA contributions are made with after-tax dollars, so your child won’t pay taxes (and perhaps penalties) until they make withdrawal

Penalty-free withdrawals of contributions at any time

• One can withdraw up to the amount of their total contributions at any time, for any reason, without paying taxes or penalties.

Early withdrawals of earnings

• If one withdraws amounts that exceed their contributions before age 59½ or before the account has been open for five years, they may face taxes and a 10% early withdrawal penalty on the earnings portion of the withdrawal.
• However, there are exceptions to early withdrawal penalties.  One can withdraw funds before age 59½ or before the account has been open for five years for several reasons (keep in mind that you may be able to avoid penalties but not taxes on any earnings), including:
  • • • Funds can be used for qualified higher education expenses
      • First-time home purchase (up to a $ 10,000 lifetime limit)
      • If become disabled
      • For certain emergency expenses
      • If unemployed, can use a withdrawal to help pay for health insurance premiums

The flexibility and withdrawal choices for a Roth IRA can make it an attractive choice for young savers who may need access to their money in the future while still providing a powerful tool for long-term wealth building.

Everyone has until April 15^th to contribute to the Roth IRA for 2024. Don’t miss out on maximizing your annual contributions.  Learn more about IRA contribution funding deadlines.

Another great way to take advantage of the power of a Roth is to setup automatic monthly contributions and dollar cost average into your investment allocation. Saving early and giving the account 30+ years to earn will boost your retirement success.  Looking for more information on setting up a Roth IRA or other savings strategies, please reach out to a WPC Advisor.

At Wealth Planning Corporation we are here to simplify your financial complexities and guide individuals and families through all of life’s transitions and into retirement.  If we can be of assistance, please do not hesitate to schedule a complimentary discovery meeting.

Planning, Coaching, Advising — since 1984