Roth IRA, How Do I Love Thee? Let Me Count The Ways

2012 March 27
by Kyle Bumpus
from → 401k/IRA

This post is part of the Roth IRA Movement started by Jeff Rose of GoodFinancialCents.com. Click the link for background info on what it’s all about.

To commemorate the occasion, I have composed a brilliant sonnet. Bathe in its glory.

Roth IRA, how do I love thee? Let me count the ways.
Thy tax-free distributions a path to retire,
financially secure, never to be mired
in dreadful labor til the end of my days.
Forever the tax man will you keep at bay,
thanks to you old age to me will not be as a blight
upon the noble tuber, nor will I have to fight
til the end, laboring ever to earn my pay.
Something something something something use
something something – something something shelf,
and to the IRS I have already paid my dues,
they shall have no further access to my wealth,
and if leaving my Roth IRA to my heirs is what I choose,
no taxes shall be paid on its earnings, not even after my death.

I am sure the epic romanticism of my awesome sonnet has convinced you to run out an open a Roth IRA immediately, but just in case you have no soul, I will out-line the most awesome of Roth IRA benefits below in a form more befitting you poor inartistic souls.

Why Roth IRA’s Are Awesome

Tax-free income - No taxes when you withdraw your money. Ever. So long as you avoid triggering any Roth IRA penalties, of course, which means you need to keep your grubby mitts of it until you’re 59 1/2 years old. And yes, I know using 59 /12 is a ridiculously stupid number, but that’s the government for you.

You can open one for practically nothing - While Vanguard imposes a $1,000 minimum to open a Roth IRA, plenty of companies will let you open one for practically nothing.  T Rowe Price will let you start a Roth IRA for $50, for example.

The government limits how much you can contribute, which automatically makes it cool - Under article 3, section 14 of the Constitution of the United States of America, the federal government is required to limit the use of totally awesome things such Roth IRAs, the reason being that too much awesome has been shown to cause people’s friggin’ heads to explode. Since too many exploding heads would impede the progress of certain Important Government Projects,  citizens are currently limited to only $5,000 in Roth IRA fun per year. Think of it this way: if you don’t max out your awesome potential this year, you’ll never get that back. Carpe diem! This also explains why such awesome things as the percentage of alcohol in beer and amount of cheese that can be legally applied to a burrito are limited.

Guys: Girls LOVE Roth IRA’s! – Guys, I can’t stress this enough. Girls love money. Roth IRAs are incredible tools at getting lots and lots of money. If you want to get your swerve on in the retirement home, you’d better be maxing out a Roth IRA in your 20′s. Otherwise, you’ll only need a one-seat motor scooter because you won’t be driving any honeys around on your discount 6 volt; not when the guy down the hall with the fat Roth IRA balance is sporting a pimped-out, gold-plated 12 volt. Remember those Bing.com commercials from a few years ago? You’ll be the guy screaming “looooos liiiiiiiiiinks!” (i.e. the one without the girl).

Girls: Guys LOVE Roth IRA’s! – Seriously ladies, no guy likes a gold digger. Having a big, fat portfolio makes you hot, hot, hot.

Roth IRA is into yoga – One of the best things about a Roth IRA is that it is so FLEXIBLE! We’re talking a real yoga master, here. Decide you don’t need the money in your IRA after all? Want to pass it on to your heirs? Roth IRA got your back! No required minimum distributions! Now what about if you have some sort of emergency? Need to pay some medical bills? Roth IRA got your back! You can withdraw your contributions completely tax-free forever and for always! Go ahead and give Uncle Sam the finger. He can’t touch you!

Roth IRA can beat up Traditional IRA – Seriously, it’s not even close. Tax-free income! No required minimum distributions! Traditional IRA is old and busted. Roth IRA is the new hotness. It’s like watching a baby take on the Incredible Hulk. Traditional IRA doesn’t stand a chance.

So go ahead, open a Roth IRA today. All the cool kids are doing it.

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One Response
  1. 2012 April 28
    Karen permalink

    Thanks for the info on Roth IRAs. Unless I’ve missed something, T. Rowe Price now has a minimum of $100 to open an account. It’s also $100 minimum to add to an account.

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