Do you have a retirement account that you manage beyond your job? If not, why not? You’re leaving tons of money on the table that can help you create generational wealth. And if your kids have earned income, you can also open a retirement account for them and put them on track to have a $1 million financial cushion.
One of the greatest investment tools that exist today is the Roth IRA (individual retirement account). If you’re a younger investor, you have more time on your hands to maximize the benefits of this retirement treasure but you’re never too old to get started.
Roth IRA is a tax-advantaged account that allows you to invest your after-tax dollars in assets that align with your investment goals. What makes this account so attractive is that all your money is compounded each year and you won’t have to pay any taxes when you take the money out at the time of your retirement. The opportunity to obtain tax-free income allows you to accelerate your wealth-building goals.
In order to take advantage of the Roth IRA, you need earned income from wages, salaries, self-employment, and other qualified income sources. Also, pay attention to the income limits and contribution phaseouts to ensure that you are eligible.
Are you ready to learn more about the Roth IRA? Here are 3 things to consider if you are on a mission to build wealth in your retirement account.
1. Max Out Your Retirement Account Every Year
The IRS raised the individual retirement account contribution limits from $5500 in 2018 to $6,000 in 2019. Don’t let those numbers scare you away. You are not required to save or add $6,000 to your Roth IRA this year. You can save $1000 for the year if that works best for you.
But if you want to increase your investing power and wealth-building opportunities, you want to max out your account with $6,000. All you have to do is contribute $500/month or $125/week to max out your retirement account within a 12-month period.
2. Invest In Assets You Understand
How do you earn money in your Roth IRA? You have to invest the money that you save in your account to accelerate your wealth-building opportunities. You can invest in stocks, bonds, options, mutual funds, exchange-traded funds, certificates of deposits, and other assets. What you invest in will determine how much you earn.
3. Work with a Certified Public Accountant and Financial Coach
If you want to build generational wealth, work with a Certified Public Accountant who can keep you abreast of all the benefits associated with a Roth IRA and help you avoid any penalties or tax consequences. A knowledgeable financial coach should be by your side to ensure you understand your options.
There are so many ways to build generational wealth using a retirement account but the best thing you can do right now is equip yourself with the information you need to get started.
Charlene Rhinehart is an award-winning speaker, consultant, and coach who uses digital technologies to share inspiring stories with the world. She helps others live their best life as a Financial Coach at Wealthy Women Daily, Founder of the Career Goddess Academy, and Travel & Lifestyle Writer at BlackCoupleTravels.com. Charlene recently published her first book, “Dividends Are a Queen’s Best Friend” on Amazon.
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