For the past couple of months I've been thinking about opening up a Roth IRA. I'm trying to decide by April 15th because the tax laws say that you have until then to have your contributions count as last year's.
So we have $4,000 sitting in checking (in part due to Uncle Sam - thanks for the refund!) and don't know what to do. It's tempting just to put it into savings with the rest of the money we've saved, but I don't know if that's the wisest thing to do. Also we do have credit card debt in the same amount, interestingly enough, so maybe we should pay that off now. But because of the miracle of compund interest I am tempted to start the Roth IRA as soon as possible. What do you guys think?...
Roth IRA
March 12th, 2007 at 11:02 pm
March 13th, 2007 at 12:54 am 1173747243
March 13th, 2007 at 12:12 pm 1173787979
(So long as you already have an emergency fund. )
March 13th, 2007 at 02:34 pm 1173796496
I no way advocate taking money out of you account. BUT if you are on the fence of adding it to savings or putting it in a ROTH, just know that it is not completely untouchable or penalized if an emergency comes up and you need it. But if nothing comes up, you don't lose your tax advantage for 2006.
I really struggle with this because I want to build up much more in our savings, in case of dire emergency, but I think we are better off using the tax shelter, particularly since I know when my dh returns to work we will have more than than the IRA max to contribute. & I will really regret if I did not take advantage of shifting all I Could to retirement in the meantime. So though I doubt I Would ever touch my retirement, it helps me to be a little more aggressive on the retirement to know I could change my mind.
I am waiting to have 3-4 months in my cash emergency fund first though. So I will most likely not have ot ever touch the IRAs. I think it is a fine line to balance. But at that point all my money is going to ROTHs then.
Oh yeah - it doesn't have to be so all or nothing either. Put $2k in a ROTH and $2k in savings if you like - another idea. If you need a kick in the pants, retirement is pretty untouchable. If you get sued your cash could be gone, if you declare bankruptcy, if anything. But retirement is golden - untouchable. ANother reason I am more aggressive on my IRAs.
March 13th, 2007 at 02:36 pm 1173796613
March 13th, 2007 at 04:41 pm 1173804103
March 13th, 2007 at 08:56 pm 1173819402
March 13th, 2007 at 09:54 pm 1173822858
And the other card has $1,000 at 7.99%.
They're good aprs but sneaky in a way...I mean it's tempting to put off paying the balance because it doesn't seem like I'm paying much in interest, but either way it's money in the credit card companies pocket, and they're probably making more with me as their customer at 7.99% than say 15% apr...because if it was 15% apr I'd pay it off right away! Hmmm...
March 14th, 2007 at 11:11 pm 1173913888
I have been nagging them to start Roth's!! I'm calling them again right now!