LogFAQs > #981485722

God_of_6strings posted...

A Roth IRA is the first thing you need to do. The important thing you need to know about it without getting technical at all, is that if you invest the $7,000 in one every year for 30 years, you're guaranteed to have over $1 million at the end of those 30 years. Probably more than $2 million. You don't have to pay taxes or fees to draw money out of them, either. That's why they're quickly replacing 401ks as the default retirement account.

But there is a $7,000 yearly limit that you are allowed to invest in them (federally regulated). After you hit that $7,000 mark each year, if you have more money to invest, you can start looking at ETFs and index funds or invividual stocks.

Well, to be absolutely clear, Roth IRA describes the type of the account. You do still need to buy an investment in your Roth IRA. It's not just like "invested in a Roth" when you put the money in. You would buy an index fund or stock or whatever you like IN the Roth IRA.

By default when you throw the money in it'll probably be placed in a generic money market fund, which won't return much. Just making that clear because some people do make that mistake and think they're investing for retirement when all they did was dump money into the Roth IRA account. Then, because they didn't actually invest it, they lost out on years of gains.