As a very financially illiterate person, I’m just now entering the adult world and trying to start being smart with my money. Any tips/advice on how to navigate opening an IRA would be lovely!
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A Roth IRA is a type of retirement investing account in the US. It isn’t an investment itself, it’s a type of account that you can have investments in.
A Roth account has tax benefits if you use the money for retirement. You’ll use after tax money and put in an interest earning investment. Once you retire, you won’t have to pay taxes on all the growth. But if you pull it out early, you’ll owe taxes and will have to pay a penalty in most circumstances (the point of this is retirement). You can also only contribute $6000 a year to it.
IRA stands for individual retirement account, meaning that it isn’t offered through an employer (like a 401k). You’ll need to go to an investment company to open one. There’s a bunch of companies that do this, but some are vanguard (where mine is), fidelity, and Charles Schwab.
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