Advertisement
taxes

Tax Day Tip: Invest Your Tax Refund in a Roth IRA

You'll thank yourself in retirement. Trust us.

The typical tax refund is about $3,000. Instead of blowing yours on Longchamp luggage or a trip to Vegas, you’ll ultimately be better off putting the money in a Roth IRA.

The beauty of this retirement account is simple: You can make withdrawals tax-free when you retire. With traditional IRAs and 401(k), you get taxed on withdrawals.

Advertisement - Article continues below

The basics: You can contribute up to $5,500 to a Roth IRA for 2017, or $6,500 if 50 or older. You can contribute the full amount as long as your income falls below $118,000 if you’re single, and $186,000 if married filing jointly. You can make a partial contribution if you earn up to $133,000 (single) or $196,000 (married).

If you work and your spouse doesn’t, you can contribute to a Roth IRA in their name subject to joint income limits. If you earn too much for a Roth, you can contribute to a traditional IRA, then convert it to a Roth later.

Learn about more smart ways to spend your tax refund.

Take the Quiz: How Much Do You Really Know About Roth IRAs?

Advertisement
Advertisement

Most Popular

How To Buy a Roth IRA When You Make Too Much To Qualify For One
Roth IRAs

How To Buy a Roth IRA When You Make Too Much To Qualify For One

With their tax-free growth and tax-free withdrawals, Roth IRAs are a great deal — if you qualify. If you don’t, well, there’s still a way to get into …
September 23, 2020
Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check
Coronavirus and Your Money

Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check

The deadline for seniors and veterans to request an additional $500 stimulus check for a dependent child is approaching fast. See how you can claim yo…
September 25, 2020
High-Tech Aids for Aging in Place
Caregiving

High-Tech Aids for Aging in Place

Apple Watch and other technology provides fast feedback, comfort for older users, and a powerful assist for caregivers.
September 23, 2020

Recommended

With Estate Taxes on Sale Now, You Snooze, You Lose!
tax planning

With Estate Taxes on Sale Now, You Snooze, You Lose!

You may want to consider gifting your home — or maybe a fractional interest in it — as well as using an irrevocable trust before it’s too late.
September 25, 2020
How To Buy a Roth IRA When You Make Too Much To Qualify For One
Roth IRAs

How To Buy a Roth IRA When You Make Too Much To Qualify For One

With their tax-free growth and tax-free withdrawals, Roth IRAs are a great deal — if you qualify. If you don’t, well, there’s still a way to get into …
September 23, 2020
The Annuity With a Tax-Planning Twist
Financial Planning

The Annuity With a Tax-Planning Twist

A qualified life annuity contract helps retirees with guaranteed payments to last their entire lives.
September 21, 2020
HSA Limits and Minimums
health savings accounts

HSA Limits and Minimums

Annually adjusted contribution limits and other requirements must be met if you're covering health care costs with a Health Savings Account.
September 21, 2020