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    14 Things About Roth IRAs That They Should Have Taught You In School

    You'll dream about Roth IRAs after this.

    Oh, retirement. I feel like we all know we should invest for the future. But it's. All. So. Confusing. I mean, just look at one popular retirement account: the Roth IRA. What even is that??

    Before we get into the nitty gritty, you should know that a Roth IRA is a type of investment account, so there is a chance that it could lose money.

    So, with that in mind, here are 14 things you should know about Roth IRAs:

    To learn more about Roth IRAs specifically, I interviewed financial expert Nancy DeRusso, who is the managing director and head of financial wellness at Goldman Sachs Ayco Personal Financial Management. Nancy broke it all down and made it easier to understand than I thought, thank goodness.

    1. To start, a Roth IRA is a kind of investing account that's designed to help you save for retirement.

    Nest with egg inside labeled IRA

    2. And it's helpful to know the difference between a Roth IRA, traditional IRA, and 401(k).

    Nest with "Roth" "IRA" and "401K" written on the eggs

    3. Unlike traditional IRAs and 401(k)s which you can write off, contributing to a Roth IRA doesn't impact your taxes now.

    4. With a Roth IRA, you can take money out before retirement without paying penalties once you've had the account open for 5 years.

    5. And, unlike a 401(k), a Roth IRA isn't tied to an employer. Anyone who earns income can open a Roth IRA.

    6. If you've left an employer, you can roll over your old 401(k) into an IRA that you control — but there are a couple rules to keep in mind.

    Change jar labeled "retirement" next to a blue piggy bank

    7. And if you wanna open a Roth IRA, there are two big ~rules~ you need to know about first.

    8. First, you can’t contribute to a Roth IRA if you make more than $208,000 (married) or $140,000 (single).

    Screenshot of IRS income requirements

    9. Second, there’s a max amount you can put in every year — currently $6,000 if you're under 50.

    Someone in a lightbulb hot air balloon reaching for a red piggy bank

    10. If you break these rules, you'll be hit with a ~penalty~, even if you did it accidentally (sorry).

    Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison

    Twitter: @jordan_stratton

    Sadly, you can’t claim ignorance. If you made too much money and/or you contributed too much in a year, you get taxed 6% every year that the amount stays in your account.

    If the damage is already done, you can fix it by taking out the excess amount that you put into the account (read the nitty-gritty details here).

    11. If your income is too high to contribute to a Roth IRA, there’s a workaround called the Backdoor Roth.

    12. If a Roth IRA sounds like it could work for you, you might want to open one sooner rather than later.

    Red start button about to be pressed

    13. Wanna open a Roth IRA? You have options!

    14. But, of course, think about your finances as a whole and save or invest for your retirement in a way that works for you.

    What other burning investment questions have you always wanted answered? Share 'em in the comments below.

    And for more money tips and tricks, check out the rest of our personal finance posts.