How to Get the Best Rate with a Roth IRA Calculator
While many people just run and gun with their Roth IRA accounts, sometimes you need a little more than you might think. With a calculator, you’ll be able to find out exactly how much you’ll need to contribute annually, how much you can withdraw at a later date to still save money for your retirement, and of course how much you’re actually going to get back on your investment later. Let’s get started!
Understanding Your Compound Interest
Compound interest is one of the major factors with any investment account, and if you can go as long as possible without touching your money, you can easily rack up millions at the end. A calculator will help you understand how much you will get off all of your contributions, and if you need to contribute more to increase your return.
Understand Your Minimum Contribution
You’re allowed to contribute $5,000 a year, but how many years should you contribute? What if you can’t contribute the max every year? A Roth IRA calculator will help you understand just how much you need to be putting towards your account; as well as how much you can spread out over the years to get the right results. This is one of the best tools any Roth IRA calculator can give you, so be sure you take advantage of it.
Converting your accounts like your 401k into a Roth IRA can bring benefits and pitfalls. Any good calculator will help you figure out how much your tax rate will be at the end of it all, as well as how much penalties you may have to pay on pre-tax (untaxed) contributions from your employer. While it’s great to keep your money all in one place, many times the taxes can end up stealing what savings you have away and rob you of all the benefits of a Roth account altogether. Don’t let this happen to you!
Never go into any investment blind, including an IRA! These will help you figure out everything you need to do with your Roth IRA account, as well as if the fund you’re using will actually give you a favorable return or not. Calculators are free, and they’re generally on the sites of those offering IRAs and other investment opportunities so check each one to make sure you’re getting the best deal.