Roth IRA Movement: Getting on board
Posted on 28 March 2012
By Mark Miller
Permanent URL of this article: http://retirementrevised.com/money/roth-ira-movement-getting-on-board
The Roth IRA became a cause for Jeff Rose several weeks ago during a talk he was giving to college students. Rose is a financial planner and blogger, and he was speaking to a group of soon-to-be graduating seniors at his alma mater, Southern Illinois University.
Rose discussed savings, budgeting and investing tips. And during the investing discussion, he asked for a quick show of hands of those who had heard of the Roth IRA.
No hands went up. That isn’t really too surprising — after all, retirement investing isn’t the number one worry for college seniors. But the knowledge gap sparked an idea: a one-day online Roth IRA Movement reaching out to young investors via bloggers and social media.
The online blast was yesterday, and Jeff says 140 bloggers and websites took part. You can read all about it in Jeff’s post, or at Twitter.
Jeff also turned the whole affair into a good time with this video he posted, including some impressive dance moves:
I’m a bit late to the party, but glad to add my voice–because for young people, Roth IRAs are no-brainers.
You can contribute up to $5,000 annually to a Roth, so long as your income is below $110,00 (single) or $173,000 (married). Unlike a traditional IRA, contributions are taxed as ordinary income, but then grow tax free forever–along with what you earn on the accounts, assuming you don’t make withdrawals before age 59 1/2.
What happens when you retire? That sounds like its eons away — but trust me, it comes faster than you think. And at that point, Roths offer great flexibility. Unlike tax-deferred retirement vehicles, Roths have no Required Minimum Distributions (RMDS) after age 70 1/2. You can even pass along the assets to your heirs tax-free — although they would have to deal with RMD requirements.
