3 Blunders You Won't Want to Make With a Roth IRA

As we have mentioned in our previous blogs, a Roth IRA is one of the best ways for individuals to start saving for retirement. However, mistakes can be made when it comes to contributing to your account. Investopedia shares a few blunders you'll want to avoid, three of which we will be talking about in this blog.

1. You contribute too much. 

It's important not to go over the allotted amount you can contribute to your IRA each year. The result of doing so will be a penalty of 6% on the ineligible amount. However, this penalty can be avoided if you take the funds out of the account before filing taxes.

2. You earn too much.

The income limits for a Roth IRA in 2019 is $122,000 for singles, or $193,000 for those who are married and filing jointly. In the case that you earn above the set income for a Roth IRA, it is best to venture into other retirement options, such as a traditional IRA.

3. You file taxes separately.

If you have a spouse, filing taxes separately from them can mean that you lose all deductions and that others become reduced. For example, if your Modified Adjusted Gross Income was $10,000 or more and lived with your spouse during the time that you filed separately, you would not be able to contribute to a Roth IRA.

Investopedia discusses more on the mistakes one should avoid when contributing to a Roth IRA. If you currently have a Roth IRA, speak with a financial advisor in order to make sure that you are making qualified contributions. By following the guidelines, a Roth IRA could be a great option for you and your family!

For more information, visit Investopedia: https://ow.ly/pYKT30n7hka

?Were you aware of some of these Roth IRA guidelines? If not, which ones surprised you the most? Share below!