IRA

Why Care?

An IRA is one of the most flexible and powerful retirement savings tools available — entirely in your control, independent of any employer.

Tax-deferred compounding (Traditional) or completely tax-free growth (Roth) creates enormous long-term advantages over taxable accounts.

You choose the investments. Unlike a 401(k), an IRA opens the full universe of stocks, ETFs, mutual funds, bonds, and REITs.

It complements your 401(k). Most people should max their 401(k) match first, fund an IRA second, then return to the 401(k).

A Roth IRA is one of the best long-term wealth vehicles ever created — contributions (not earnings) can be withdrawn anytime, penalty-free.

Know the income limits. Roth IRA contributions phase out at higher incomes ($161,000 single / $240,000 married in 2024). If you earn too much, explore the Backdoor Roth IRA strategy.
Contribute early in the year. Funding your IRA on January 1st vs. April 15th gives your money an extra 15+ months of compounding every year.
Choose Roth if you’re young or in a lower bracket. Dave Ramsey is a strong Roth advocate — he recommends Roth IRAs and Roth 401(k)s for virtually everyone who qualifies. The Money Guy Show agrees: tax-free growth over 30–40 years is almost always more valuable than a small deduction today. If your employer offers a Roth 401(k), strongly consider it.
Invest — don't just save. Many people open an IRA but leave the money in cash. You must actually select investments for the account to grow.
Max it out every year. The 2025 contribution limit is $7,000 ($8,000 if you're 50+).
Name beneficiaries carefully. IRAs pass outside of your will — review designations after every major life event.