- Your contributions to a ROTH IRA are "capped" at $5,500 per year. But you have until April 15th (or the tax return due date) of the following year to make your contribution and still have it count for the previous year. For example: If you make a $3,000 contribution after 1/1/2014, but before 4/15/14, you may elect to have it count towards tax year 2013. The advantage is that you would still be eligible to contribute the full $5,500 for tax year 2014.
"Does that mean I would get the full interest rate for the year?"
- Your contribution will begin to grow (or lose) on the date you make the contribution. You do not make any "interest" for any period prior to the contribution date.
" What is the current interest rate?"
- The "interest rate" is determined by the investments you make within the ROTH IRA. If you invest in bank CDs, your "interest rate" will be about 1%. If you "invest" in a balanced mutual fund(s), your "interest rate" will vary - but you might expect around 8% over the long term.
" I do not understand it much?"
- No, you do not. But saving for retirement is not difficult to understand. You should read up on the way these accounts work (accounts like ROTH IRAs). If your boss sent you to an outside financial advisor, you can begin by talking with them. You might also want to look up the nearest Edward Jones office (www.edwardjones.com), and make a no-obligation appointment to talk with them. They are experts in helping people like you who understand that saving for retirement is important, but do not understand the process.
you have until apr. 15 to make a contribution for last year. Then you can make an additional contribution for this year. I think your boss is giving you VG advice. There are many places that will do this for you. Look at Fidelity or Vanguard; talk with them, and they'll explain all this to you.
The big advantage to a Roth IRA is that the earnings are not just tax-deferred, they're tax FREE!
You will not get the full interest rate for the year, in fact depending on how you invest the money you may not get any interest, but you could be purchasing low cost stocks and bonds in mutual funds, I too agree contact Vanguard or Fidelity, check their web sites, sometimes there is a minimum contribution you have to make in order to get into a fund and remember if you invest in stocks and bonds there are no guarantees, you could lose a portion or all of you money depending on what happens in the markets. If you are risk adverse, a Money Market fund may be the way to start until you see what is happening (less volatility but less opportunity for your money to grow)
Roth IRA is the best investment that you can make within life
Retirement savings should be mandatory within this country (usa)
Hope i helped. Take care
I am a recent college graduate and my boss wants me to start putting money in an IRA (he recommended an outside financial guy to help me with it because my boss does not have a retirement plan set in place at work.
My boss said something about putting a couple grand in the IRA before April 15th. Why is this? Does that mean I would get the full interest rate for the year? What is the current interest rate? I do not understand it much? Thanks.
