Can I do a Roth IRA like this?

Question

Do you HAVE to make yearly contributions? Let's say I am 19 I open one with $4,000 I go to college for 4 years. Then, I start putting into it. I have one at fidelity... haven't contributed yet!

Answer 1

You can contribute up to 4K a year for a single person right now....doesnt mean you have to contribute that amount per year.

Answer 2

You do not have to contribute yearly. There are IRS rules to yearly contributions based on your income. Please review the IRS website for specifics on how much you can contribute. My opinion is you'll have to contribute to Roth IRA as well as your future employer savings plan (ie: 401(k)) to have sufficient retirement funds. I started my IRA when I was 18 with $500. Sixteen years later I am very happy I tried to contribute something every year, as well as my employer 401(k). Right now I have a very good retirement amount and still have about 25 years to go before retirement. Although I may be able to retire sooner depending on my financial situation down the road. Sorry for the long winded reply, but I feel you should at least contribute what you can to retirement every year. You will thank yourself 30 years down the road. Trust me...I already am. Hope this helps your thought process on IRA and other retirement vehicles.

Answer 3

one of the best rules of thumb for any long term investment like a roth ira, is to make consistent contributions. doing so on a monthly basis is a good idea. let's you take advantage of dollar cost averaging. i would recommend taking a good look at your budget and figuring out how much you can afford on an annual basis. then setting up automatic monthly payments to your brokerage. 4K is the annual max for a roth, but you can always do less.

by the way, kudos on making such a wise decision at 19!! the roth ira is simply the best way for young people to start saving long term. good luck.

Answer 4

You don't have to make yearly contributions, but it's wise to do it.