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My ROTH IRA Plan

Since 2019 I have been contributing to my ROTH IRA. That is about $6,500 per year.

You could use a ROTH as your savings account or it could an investment account.

    1. Robinhood

    I started my ROTH account with Fidelity and they are a great provider. The investments I made into the Robinhood account are not going anywhere. But times change.

    Robinhood now matches 1% of anything you deposit into your ROTH IRA account. That is $65 per year if you max out your contributions. That is free money that could be added to your investments.

    2. Max it out

    The 2023 max is $6,500 for someone younger than 50. $7,500 for someone older than 50. I expect these limits to continue being increased annually for years to comes. That means every year or two you will be adding more to this account annually. Specifically because of inflation continues to be high.

    With annual increases, dividends and capital gains the snowball should really grow big over time.

    3. Stocks

    You are allowed to invest in whatever you want inside a ROTH IRA.

    I prefer stock investing, because it is easy and convenient. I am already heavily investing ETFs so I prefer to pick individual stocks when I can.

    I have also thought about real estate investing through my ROTH.

    Once I build up a large sum inside my ROTH I may decide to use a portion of the funds to invest in real estate.

    4. Dividends

    One of the best things about a ROTH IRA is that the funds will grow tax free as long as you keep them in the account and invested. In my ROTH account I am only choosing specific dividend stocks. I like receiving cash, who doesn't?

    5. Exit Plan

    The downside of a ROTH is that you cannot withdraw gains from the account till 59 1/2.

    Which means that I will likely be putting money into this account for 25+ years.

    My plan is invest for 25 years and stop reinvesting the dividends using the cash to pay for living expenses.

    6. Real estate and private equity

    You can you put real estate and/or private equity inside a ROTH account. One I have a good sum of money in funds in my ROTH account I will explore these other two options.

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