A Roth IRA is a special retirement account where you pay taxes on money going into your account when you start earning a certain amount of income. It’s only available to taxpayers who meet certain income thresholds. If you are retired or unemployed, or between job changes, you can’t contribute to an IRA.

What is a Roth IRA? | Meridian Financial Partners

Individuals who are over 50 and receive Social Security income or veterans’ benefits can contribute a maximum of $6,500 (or $6,800 if you are disabled) per year to their 401(k), 403(b), or 457 retirement plan, whichever is more.

If you pay into your Social Security benefits plan, you will not need to pay taxes on these amounts.

You can choose to have your employer match your 401(k) contribution. If you elect to contribute to your 401(k), your employer will match this contribution dollar for dollar up to 6% of your eligible wages. The same company won’t have to contribute to your 403(b), or 457.

If you want to contribute to your traditional IRA, you can do this without having to pay taxes on this money. In fact, your total contributions for the year can be up to the amount of your traditional IRA earnings plus your earnings from a qualified fund. You can’t contribute more than the amount of your traditional IRA earnings. If you are still unsure, wee suggest using a roth IRA calculator to calculate the balances of Roth IRA savings and compare them with regular taxable savings.

Qualified fund: If you contribute to a traditional IRA, you must have at least one of the following to qualify for the matching contribution.

Sector funds: IRA funds in the following categories: stocks, bonds, and mutual funds that invest in companies in a specific industry sector. The qualifying mutual funds may also be specific to certain industries or certain sectors of the economy.

Other investments: IRA funds that invest in non-qualified securities, including foreign securities.

You must be employed at the end of the year for the contributions to be made.

If you make qualified contributions to a 401(k), 403(b), or 457, your employer can make any amount of money contributions and make these contributions before you do.

If you are self-employed, you may not be able to make any contributions to your retirement account.

Saving for a retirement account isn’t as easy as it sounds. First of all, you have to understand what your assets are worth and how much you’ll need to retire. (Read more about what to do about taxes in retirement.)

Next, you’ll want to do a little research on how much money you need in your retirement account. You’ll also want to invest in a low-cost, low-fee investment account (if you haven’t already) to make it easier to save money for retirement. The free Vanguard funds that we recommend are Vanguard Fidelity Retirement Funds.