Categories
Budgeting & Saving

How to Fix Bad Credit?

Wondering how to fix my credit myself? Or how to fix bad credit? There’s no doubt that living in the modern world requires credit. Yes, you can live without a credit card and survive on cash or cashback debit cards.

I know because I did it for over two years as I paid off credit card debt. But what I really wanted to do was improve my credit score immediately.

However, when you are ready to buy a house, you’ll need to get your credit straightened out. In this post I’ll discuss getting a credit repair service as well as what steps you need to take if you decide you want to fix your credit score yourself. You might even be able to fix your credit in just 6 months.

These steps are so easy. Perfect guide for do it yourself credit repair.

Related articles from our approved partners:

How Can I Fix Bad Credit Myself? – 6 MonthCredit Repair Guide

First, watch this video from my friend Dominique over at Your Finances Simplified. He’s going to tell you exactly how to fix your credit.

Watched the video? Good.
Feeling overwhelmed at the next steps?
Yep. I understand.
Let’s take this step by step.

Take a deep breath. People think that having bad credit is the worse thing that can happen. But just calm down. You are taking the first steps which puts you on the right track.

Remember, it’s just money.

No one is going to die. Take control and get back in the driver’s seat!

Fix 1: Check Bad Credit

The first thing you’ll need is your creditor information. Get the most recent credit card statements, loan balances, and installment loan reports along with addresses and phone numbers. I recommend printing everything old-school style. It’s going to come in handy later.

Fix 2: Get a Free Credit Report

Then, take a second to get your free credit report from AnnualCreditReport.com. Each year you are able to pull your credit report for free from the three providers Experian, Equifax, and Transunion.

Optional: Get Your Free Credit Score

You can check an approximation of your credit score for free at Credit Sesame one of our approved partners, but if you are trying to fix your credit, you probably already know your credit score looks a little like this….

bad credit personified

But that’s ok. We’re going to put you on the good foot.

Fix 3: Review your credit report for errors (highlight each error).

You’re getting ready to take charge and stop being a victim. Most people don’t even realize what they could get removed from their credit just because of errors.

What should you look for?

Wait a minute. So, you’re telling me you didn’t watch the video above?

Scroll back up for me right quick and you’ll find out exactly what you should look for.

Or keep reading…

Dispute incorrect names, addresses, SSN, and date of birth via the certified mail.

You will need supporting documentation and letters. You will have to write a dispute letter and include the specifics of the inaccuracies. You want to dispute inaccurate, erroneous, outdated, misleading, and unverifiable information in your credit reports.

Tired of being harassed by your creditors? Maybe you’d prefer that someone else handle all of this for you?

In that case, you might was to work with a credit repair company to improve your credit.


Are you ready to…

  • Remove bankruptcies to rebuild credit?
  • Permanently delete foreclosures and repossessions?
  • Erase debts that were in collection?
  • Completely get credit cards under control?
  • Get approved for loans?
  • Get the best financing on cars and homes?

In that case, check out our partner Lexington Law for more details on how they can help you clean up your credit report.

Finally, fixing your credit permanently also means creating good habits and getting out of debt.

How getting out of debt is like the MTV show, I Used to Be Fat.

I used to watch this TV show on MTV called I Used to Be Fat. The show documents young adults, usually high school seniors and high school graduates who want to lose weight before they start college. Each episode features a different teen. I absolutely LOVE this show. I like seeing the determination and perseverance of these kids, they are really focused on their goals. Most of them thought about quitting along the way but each one makes it to the end and they usually reach their goal.

I was thinking the other day about how the TV show is very similar to a battle with debt. When you’re in debt, it can feel like you’re carrying around a second person, experiencing frugal fatigue, or that you have a spare tire of bills around your waist. I know because I’m working on getting out of debt myself. I realized that there are 3 major points we can learn from the MTV show I Used to Be Fat when trying to take control of our debt.
debt

Improve Your Credit Step 1 – Give Yourself a Deadline

Before the teens even begin a weight loss program, their coach/personal trainer gives them a large tear off number calendar to place on their wall. It has the total number of days until their program completion date, and every day they rip off the next number.

It is a good idea, when you are paying off debt, to set a deadline for your debt-free date, like 6 months. Setting a deadline is a way of making your goal specific. Every time you look at that calendar or see that date it will push your brain consciously and subconsciously to make it to your ultimate goal, to reduce spending and get out of debt.

Improve Your Credit Step 2 – Check in Regularly with a Coach

Every week, the kids had a weigh in. Their personal trainer was making sure that they were on track with how much weight they were supposed to be losing at each stage in the process. Sometimes they were attempting to lose one pound a day! I never thought that was possible or healthy, but most of the teens actually accomplished it under the supervision of their coach.

If you really want to prioritize your goal of becoming debt free then you really have to give yourself check points. You can enlist the help of a friend or even a debt counselor to help you along the way. Having a good support system can make all the difference.

Improve Your Credit Step 3 – Get Rid of Old Habits and Create New Ones

When one of the teens was at a restaurant with her friends, she ordered a lean meal instead of the greasy french fries that her friends had. The personal trainer also taught her how to cook healthier meals so that she would be able to maintain her new lifestyle change.

Becoming debt-free is not a one-time goal. It has to be a lifestyle change. When I decided to start getting out of debt, I had to first evaluate why I was in debt in the first place. I had to eliminate my habit of impulse spending and replace that habit with a good habit. Now I impulse buy stocks and my portfolio loves it! It’s not easy to change a habit that took years to cultivate, but with a good support system, it is entirely possible.

Are you ready to make a change?

Some of you may be thinking, I’m still young, so why should I care about my credit score? Lots of people have debt and less than stellar credit, but they’re still enjoying a cushy lifestyle. As long as I’m able to buy the things that I want, why should I be concerned? The answer is simple. Life is easier when you have good credit.

Take a look at it this way. Landlords, employers, and lenders need to determine whether they can trust you, and they look at your credit score as an indicator of your financial reputation. You may not think credit affects you greatly, but it does. When you ruin your financial reputation (a.k.a. credit score), it will take you a long time to restore it.

Poor credit affects your ability to rent, buy a car, get a home loan, and even open up accounts. Creditors don’t want to work with people with bad credit because the risk of not getting paid is very high. How can they trust that you will pay them back if you haven’t even paid others? If you’ve already tarnished your credit, here are some tips to help you fix your credit score and reestablish your life.

Improve Your Credit Step 4 – Make Your Payments on Time

This may sound trivial, but we all know that money can be tight, and skipping payments on one bill can help pay for other expenses. But, timely payments are the biggest factor affecting your credit score. Keep a budget, and make sure you have sufficient funds to make your credit card and loan payments on time.

Improve Your Credit Step 5 – Consider Getting a Secured Credit Card

Obviously, it will be very hard to get a regular credit card if you have bad credit. If you don’t qualify for a credit card, you can get a secured card instead. This is when the bank gives you a credit line equal to the deposit you make. If used wisely, a secured card can help nurse your poor credit to better health.

Improve Your Credit Step 4 – Add an Installment Loan

You can improve your score quickly if you show that you can be responsible for both major kinds of credit: revolving (credit cards) and installment (mortgages, auto, student loans, etc.). If you don’t have an installment loan and feel you are ready to handle one, consider adding a small personal loan. Stay away from expensive finance companies and “teaser” deals, and use a company that reports the loan to all three credit bureaus.

Improve Your Credit Step 5 – Avoid the Minimum Payment Trap

Credit cards come with high interest rates. We all know how our $2,000 computer ended up costing $8,168 because we only made the minimum payments at 20% on our credit card. Ouch, that hurts! Keep constant payments on your credit card (and don’t run them up again) and your balances will drop.

Improve Your Credit Step 6 – Use Your Credit Cards Lightly and Check Your Limits

Even if you pay your bills on time and in full each month, having big balances can hurt your score. Try to limit charges to 30% or less of your card’s limit. Lenders typically like to see a big gap between how much you’re charging and your available credit limit.

Improve Your Credit Step 7 – Keep Old Credit Cards

Don’t close out old credit cards. The longer your credit history, the better. Leave the accounts open but once you pay them off, stop using them. Closed accounts tend to bring down your score.

Improve Your Credit Step 8 – Suspend Credit Inquiries

The more credit inquiries you have, the more your credit score drops. Fix your credit and wait a while before allowing your credit to be pulled again.

Improve Your Credit Step 9 – Get a Goodwill Adjustment

If you have been responsible about paying your credit cards on time, the lender may agree to erase a late payment from your credit history. For more troubled accounts, communicate with your lender about possible options to erase previous delinquencies. If the lender agrees, it will improve your overall record.

Improve Your Credit Step 10 – Check Your Credit Report for Errors

You can check your credit report without negative scoring (once per year, for free) with the three credit bureaus at AnnualCreditReport.com. Make sure to look for any mistakes that could be hurting your score. If you see something wrong, make the effort to have it corrected.

Improve Your Credit Step 11 – Seek Professional Help

If you are overwhelmed with debt and don’t feel you can handle the problem on your own, consider working with a professional debt relief agent. They can help you explore your options and give you guidance on this post

It’s very easy to ruin your credit, but it takes time to build it back up. No matter how bad your credit is, you can take steps to make it better.

Sometimes we mishandle our budget, and we spend more than we should. (You know that you shouldn’t have bought that expensive flat screen TV). And, sometimes we end up in tough financial situations because of things beyond our control. Whether you have experienced job loss, illness, or another type of financial disruption, it’s important to know that you can turn things around.

It may not be easy, but step by step, you will be able to fix your financial situation. Just don’t delay facing the issue. The longer you wait, the harder it is for you to recover.

Categories
Budgeting & Saving

What Should I Do With My Old 401k?

How long have you been with your employer? And how long do you plan to stay there? As a millennial, you may have a feeling of restlessness. An article from Forbes argues that job hopping is the new normal for millennials. And the most recent data released by the Bureau of Labor Statistics states that employees tend to stay with their current employer an average of 4.6 years.

If you have been with your company for a few years, you are probably thinking of that next step. It is important to continue to grow your career and stretch yourself in the process. You may decide to continue your education and go back to college or start a professional certification. Maybe you are thinking of taking some time off to travel and discover what you truly have a desire to do. It is possible that you’ve realized that you can support yourself with your side hustle and you are ready to become a full time entrepreneur.

Free Money

During your time with your employer you have likely contributed to the retirement plan. If your company offers a match program for retirement contributions, you likely contributed to take advantage of the free money.

Staying with your employer? Click here to watch why free money should make you dance.

Now that you are thinking of leaving, you wonder, “What happens to all of that money in my 401(k)?”

Don’t panic.

It’s your money. And you can take it with you.

And that’s where the Rollover IRA comes in.

The Rollover IRA

As an avid reader of Young Finances, you’ve heard of the Roth IRA and the Traditional IRA. You know that IRA stands for Individual Retirement Account and that it is a savings vehicle designed to help you save for retirement. You know that you will need to designate a beneficiary and that I have a preference when it comes to tax free money.

But I have yet to mention the Rollover IRA.

A Rollover IRA, also known as rollover, is simply a transfer of funds from a retirement account such as a 401 (k) into a Traditional or Roth IRA.

Let’s assume that you have already left your job. Starting a rollover will allow you to move assets from a 401(k) at your old employer into a brand spanking new IRA, Traditional or Roth. In essence, you would contact the administrator that holds your 401(k) and let them know that you want to rollover. They would close out your 401(k), cut you a check and you have 60 days to deposit that into an IRA account that you open.

The Rollover Tax Question

Of course, when dealing with retirement distributions, you have to consider the tax implications. Let’s see what the Internal Revenue Service has to say about it.

Will taxes be withheld from my distribution?

IRAs: IRA distributions paid to you are subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. Withholding does not apply if the distribution is paid directly to another IRA trustee.

Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement account. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding.

Well there you have it. Directly from Uncle Sam himself.

Tax withholding can be avoided if you roll over the distribution from a retirement plan directly to another retirement account.

You may also be thinking, why should I roll over?

Why not take the distribution, pay the tax penalty and buy a yacht to travel the world?

When you roll over a retirement plan distribution, you generally don’t have to pay tax on it until you withdraw it from the new plan. By rolling over, you are saving for your future and your money continues to grow tax-free.

If you want to allow your money to grow tax-free then a rollover may be right for you.

Ready to Rollover Your IRA?

I’ve discussed Betterment here at Young Finances several times. I have a Roth IRA with them and a few sub accounts dedicated to travel, long term investing and a recent investing challenge. I like them because they provide an easy way to invest with low costs. Betterment portfolios are customized based on your personal preferences and risk tolerance and they work around the clock optimizing returns at every level of risk.

It’s free to roll over 401(k) assets or an IRA to Betterment. There are no trading costs and portfolios contain cost-efficient index funds.

They make things easy.

To transfer your 401(k) assets, the direct rollover method is used which prevents any withholding or tax consequences.

Betterment also provides a rollover concierge to you and they are available to speak to your current 401(k) or IRA provider to make sure the transition of assets is completed smoothly.

Not rolling over? Open a Betterment account today and get a month free.

Something that could take days and tons of paperwork is made easy with Betterment. Instead of an overwhelming, time-consuming process, Betterment takes steps to ensure your money is put to work in an optimized portfolio as soon as possible.


Now that you know how easy it is to roll over, what job will you look for next? Or would you rather take a year to travel the world?

Originally posted 2014-10-06 06:00:58.

Categories
Young Finances

Should I Pay Off Student Loans or Invest?

As a recent college graduate, it’s likely that you have student loan debt. According to the National Center for Education Statistics,

“From academic years 2006-07 to 2010-11, the percentage of first-time, full-time undergraduate students at 4-year degree-granting institutions receiving any financial aid increased from 75 to 85 percent.”

With an average 4-year tuition cost of 21,000 dollars, and more and more students taking on student loan debt; a portion of your salary will go directly to paying of this debt. (Source)

However, if you research investment strategies, you’ll see the same advice over and over again. Start early and use time to your advantage.

Starting early puts the power of compounding on your side. That means more money. That also means that you are faced with a difficult question. Should you pay off student loans first or invest?

Before you can answer that question, you should evaluation your personal situation.

Do you have any other debt?

Do you have any other debt aside from student loans such as credit card debt, car loans, or medical bills? Even though your balance of student loan debt will typically be higher, these types of debt often have a higher interest rate. In order to save money on fees and interest. You should work on paying these off first. In addition, student loans give you more flexibility in terms of deferring payments whereas, waiting to pay credit card debt will most certainly affect your credit score negatively.

How much money do you have saved?

If you lack emergency savings, and you have an unexpected expense, you will cause yourself more stress than necessary. Emergency savings of 2-3 months of expenses as a bare minimum will help you manage most unexpected expenses such as hospital bills or car accidents. Take some time to build up an emergency savings fund first before you consider investing.

If you have all other debts in check and you have already set aside your emergency cash, now you can consider if it is better for you to pay off student loans or invest.

What types of loans do you have?

Typically, government issued loans have a fixed interest rate. If you do not have a fixed interest rate, then it would definitely be much wiser to pay off that loan as much as possible (or entirely) before you consider putting your money into investments. This is because when it comes to finances, figuring out what is certain and what is uncertain will help you determine where to put your efforts.

Are you ready to risk investing?

There is no such thing as a safe investment. The market can crash and businesses can go under at any time. Some investments are safer than others. When investing, there is a trade off between the risk you take and the reward you earn. The higher the risk becomes, more money will be returned on the investment. Only you can determine what types of risks you’re willing to take in your investing.

One final consideration is how you feel about your student debt. If you are the type of person who is uncomfortable with knowing that you owe someone a lot of money, or you have concerns about making that payment every month, then the answer should be obvious. Pay off your student loans.

There were many questions posed in this article. That is because there are many things to consider with a question such as this. You are the only person who can determine which choice is the correct choice. Evaluate your situation carefully, and make a decision that works best for you and causes you the least amount of worry.

This post was originally published as a part of the PNC Achievement Sessions helping you get smarter about money. Click here for more articles.

Originally posted 2014-08-20 06:00:42.

Categories
Investing

15 Totally Random Facts About People Who Retire With Roth IRA Money

“The best time to start thinking about your retirement is before the boss does.” Anonymous

Opening and investing in a Roth IRA will allow you to have a pretty sweet nest egg of tax free money once you are ready to retire.

Now that you are a member of the Roth IRA club, you should know a few totally random facts about people who retire or plan to retire with tax free money.

1) They are much more intelligent than those around them.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

2) They have seen the movie Office Space enough times to know exactly how they envisioned their final day at work.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

3) They enjoy either beaches, skiing, or golfing.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

4) They frequently take videos of themselves relaxing by the ocean.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

5) They enjoy drinking fruity drinks by the beach.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

6) They find math interesting and may not have a TI-83 graphing calculator but they’re pretty handy with a retirement calculator.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances
(Calculator Courtesy of Bloomberg)

8) They frequently ask, “what’s your number?” to start up a discussion on retirement savings.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

(Courtesy of ING)

9) They secretly love/hate either Dave Ramsey, Suze Orman, or Robert Kiyosaki.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

10) They’re not afraid of using travel reward credit cards to book flights around the world.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

11) They’ll travel to foreign countries and stop in a new restaurant just for the free fire show.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

12) They think the Roth IRA is a retirement account that is really awesome. Fo sho!

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

13) They know exactly how well balanced their portfolio is thanks to Personal Capital.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

14) They love the Roth IRA so much they’re willing to put on a wig to spread the word.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

 

15) They’re vigilant. They know that this list skipped the number 7. They keep an eye on every dollar. Every dollar!

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

This post is a part of a special Roth IRA series. See the other posts and videos by clicking over to The Ultimate Roth IRA Guide for Young Adults.

Originally posted 2014-08-14 05:00:02.

Categories
Investing

10 Important Roth IRA Rules. Number 7 is a Shocker.

By now you should know that the Roth IRA is a pretty important component to any healthy financial plan for a young adult.

If you missed the reasons why you can watch this video, or read this post.

Now it’s time to learn the basic rules for the Roth IRA. I’ve pulled the most important points together so you won’t spend time on what you don’t need to know. But if for some reason, you want all of the Roth IRA rules, check out IRS Publication 590.

How Much Can I Contribute to My Roth IRA?

1) If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of $5,500 ($6,500 if you are age 50 or older), or your taxable compensation.
The contribution limits have the potential to change each year. In the last few years they have not changed, but you should double check if they have changed each year the new IRS rules are released.

When Can I Contribute to My Roth IRA?

2) You can make contributions to a Roth IRA for a year at any time during the year or by the due date of your return for that year.
If you are contributing for the year 2014, you can contribute for 2014 even into April of 2015 when tax returns are due. This is a great way to catch up if you missed the opportunity to contribute.

What if I Want to Contribute More to My Roth IRA?

3) A 6% excise tax applies to any excess contribution to a Roth IRA.
Double check your contributions before the tax year ends. Request a withdrawal for any extra contributions you’ve made in order to avoid the excess contribution penalty.

Can I Change My Mind and Open a Roth IRA if I Already Have a Traditional IRA?

4) You can convert a traditional IRA to a Roth IRA. The conversion is treated as a rollover, regardless of the conversion method used.
In order to convert, you will have to pay taxes on the balance of the Traditional IRA. Those are ‘before-tax’ dollars and they have to be changed into ‘after-tax’ dollars.

Don’t worry.

The IRS will handle that little bit of magic for you.

10 Important Roth IRA Rules. Number 7 is a Shocker. | Young Finances

When Can I Withdraw from My Roth IRA?

5) You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA.

How Much Can I Withdraw from My Roth IRA?

6) Direct contributions to a Roth IRA (principal) may be withdrawn tax and penalty free at any time.
You are free to withdraw your contributions at any time. Even if you just opened your account last year or two years ago. No special forms needed. Just don’t withdraw earnings. Then the tax man cometh.

Is There a Way I Can Withdraw Roth IRA Earnings Penalty Free?

7) If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them.
If you withdraw contributions and earnings typically you are taxed, but if you take them in the same year you contributed, then it’s like the contributions never happened!

When Can I Withdraw All of My Money From My Roth IRA?

8) Generally, if you are under age 59½, you must pay a 10% additional tax on the distribution of any assets (money or other property) from your Roth IRA. Distributions before you are age 59½ are called early distributions.

Are There Any Exceptions? What if I Want to Buy My First Home?

8b) You may not have to pay the 10% additional tax if you are in one of the following situations.

  • You have reached age 59½.
  • You are totally and permanently disabled.
  • You are the beneficiary of a deceased IRA owner.
  • You use the distribution to buy, build, or rebuild a first home.
  • The distributions are part of a series of substantially equal payments.
  • You have unreimbursed medical expenses that are more than 10% of your adjusted gross income (defined earlier) for the year.
  • You are paying medical insurance premiums during a period of unemployment.
  • The distributions are not more than your qualified higher education expenses.
  • The distribution is due to an IRS levy of the qualified plan.
  • The distribution is a qualified reservist distribution.

How Long Can I Keep My Roth Account?

9) You are not required to take distributions from your Roth IRA at any age.
Want to leave your money in the account? You can do that. This rule works pretty nicely when you purchase an investment property inside of a Roth IRA.

What Happens to My Individual Retirement Account When I Die?

10) A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either inherited the other Roth IRA from the same decedent, or was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA.

Married and your spouse passes away? You can combine both Roth IRA accounts into one for the surviving spouse. A Roth IRA can also be passed down to a child as an inheritance. Now that’s how to begin building generational wealth.

And now you know the basics of the Roth IRA. Have you fallen in love yet?

Anything else you know or like about the Roth IRA?

This post is a part of a special Roth IRA series. See the other posts and videos by clicking over to The Ultimate Roth IRA Guide for Young Adults.

Originally posted 2014-08-13 06:30:43.

Categories
Investing

What is a Roth IRA and Why Do I Care?

Remember that time that Trace Adkins warned that little girl not to grow up too soon?

Don’t remember? Let me catch you up.

As the song begins, there’s a little girl that can’t wait to turn 18 and get out of her mother’s house. Then the hook comes with the warning. It goes a little like this.

She was staring out that window, of that SUV
Complaining, saying I can’t wait to turn 18
She said I’ll make my own money, and I’ll make my own rules
Mamma put the car in park out there in front of the school
Then she kissed her head and said I was just like you

You’re gonna miss this
You’re gonna want this back
You’re gonna wish these days hadn’t gone by so fast
These are some good times
So take a good look around
You may not know it now
But you’re gonna miss this

I have a similar warning, but it has nothing to do with popular country music.

If you don’t take the time to figure out how a Roth IRA can benefit you, you’re gonnna miss this chance for tax free money.

This one financial vehicle is often quoted as the best financial tool for young adults.

What is the Roth IRA?

IRA stands for Individual Retirement Arrangement, but the lettering is often used interchangeably with Individual Retirement Account or Individual Retirement Annuity because these are the two options for opening an IRA.

The Roth IRA was set up under tax law as a way for US citizens to save for retirement with tax benefits.

With the Roth IRA you have the ability to deposit funds today that have already been taxed.

Once you reach the age of eligibility to withdraw, as long as you satisfy the requirements, you do not pay taxes on withdrawals.

You can open a Roth IRA pretty easily with a bank, broker, insurance agent, or custodian licensed to accept retirement assets.

Remember that an IRA is an individual account. It cannot be opened as a joint account.

You can contribute to a Roth IRA within the Roth IRA rules and guidelines, which is covered in part two of this series.

Opening and contributing to a Roth IRA is one of the best ways to save for retirement and grow your assets.

Now that you know how to grow your assets, you can sing about your Roth IRA’s honky tonk, badonkadonk.

My Roth IRA Helps Me Grow My Assets, Honky Tonk, and Badonkadonk | Young Finances

Information courtesy of Publication 590 via the Internal Revenue Service.

This post is a part of a special Roth IRA series. See the other posts and videos by clicking over to The Ultimate Roth IRA Guide for Young Adults.

Originally posted 2014-08-11 06:00:00.