If you hope to one day retire you need to start saving now for buy a toolkit. And a Roth IRA is a perfect place to stash those retirement savings. The withdrawals you take from your Roth IRA during retirement are tax free since the money you are contributing has already been taxed.
In 2013 the maximum contribution to a Roth IRA is $5,500, or if your 50 or older, $6,500. If you haven’t hit the maximum mark yet or are just looking for a few ways to save faster next year here are 3 steps you can take to max out your Roth IRA in record time.
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#1- Calculate Your Contribution
If six months is record time for you to max out your Roth IRA, figure out how much money you need to contribute each month to reach the goal. If it takes $5,500 to max out your retirement savings then you need to contribute $916.67 each month for six months.
You can break this down by weekly goals to make it more attainable. In this instance you would need to set aside $229.17 per week for six months.
If this is more than you can handle figure out what you can contribute each week and then look for more ways to save. If you want to hit the max mark in a shorter or longer time period calculate how much you should be saving each week.
# 2 – Splurge Less, Save More
Now that you know what you can contribute each week you should be looking for ways to cut your costs until you max out your Roth IRA.
Here are a few things you can do:
- Create and follow a budget
- Only buy necessities
- Look for ways to save on your daily purchases
- Look for crazy ways to save money
Every extra dollar you can throw at your retirement savings will get you one step closer to maxing it out in record time. Remember, these sacrifices only have to be temporary. After you reach your goal you can go back to your normal way of living.
# 3 – Earn More
Once your budget is under control and you’re throwing all the extra money you have toward your Roth IRA the next logical step is to earn more.
If you work hard at it you can easily make an extra $1,000 in your spare time. You could start a side business, freelance, or work more hours at your current job. Think of how far an extra $1,000 a month would go toward your retirement funding.
Max Out Your Roth IRA in Record Time
Saving for retirement is an essential part of your personal finance plan. The earlier you start saving the more money you’ll have to retire on. This is why it’s extremely important to make regular contributions to your Roth IRA each year.
With some hard work and by following these tips you’ll be able to max out your Roth IRA in record time.