Why You Need a Roth IRA
One of the smartest money moves a young person can make is to invest in a Roth IRA — and setting one up is easy.
Follow the rules, and any money you put into one of these retirement-savings accounts grows absolutely tax free: You won't owe Uncle Sam a dime as you let your savings accumulate, or when you cash out in retirement. Plus, an IRA is more flexible than a 401(k) and other retirement plans because you can invest it in almost whatever you want, from stocks and mutual funds to bonds and real estate.
If you haven't yet opened this gift from Uncle Sam, do it now. You have until your tax return deadline to set up and make contributions for the previous tax year. The government sets a limit on how much you can contribute to a Roth. The limit is And, although you have until next year's tax deadline to kick in your 2021 contribution, the sooner your money is in the tax shelter, the sooner the tax-free earnings begin to accrue.
