I cringed as I transferred $5,000 out of our checking account yesterday. That money looked so pretty, sitting there all happy, waiting for its turn to venture to the land of ING, where it would live comfortably amongst our various savings account. But this chunk of change had a different future. A less glamorous, albeit still important, destiny.
As much as it hurts taking money out of savings/checking to put it in to a retirement account –specifically our Roth IRA– it’s the right thing to do. Or at least that’s what the PF gurus say.
I learned about Roth’s shortly after I graduated college in 2007. Upon learning of their many benefits, and few drawbacks, I promised myself I would fully fund my Roth every year. No excuses. Five years later, I’ve stayed true to my word.
Contributing to my Roth used to be more exciting. Probably because when your account balance is $5,000, and you add $5,000 more following year, you get to watch your investments literally double overnight. But now that my contributions are a fraction of the overall account balance, I just get bitter that I have to take money out of checking.
Stupid brain making me think stupid things.
I know the benefits of contributing to a Roth are huge for someone my age. Investing from age 25 to 35, and then never again, will leave me wealthier than a 35-year-old who contributes $5,000 every year until age 60. The 35-year-old would put in over double my contributions and STILL come out hundreds of thousands of dollars behind me come retirement.
If you are a 20-something reader of PDITF and you HAVEN’T contributed to a Roth IRA before, it’s time you put down your iPhone 5 and Starbucks, and get yo shizz together. Your future self-will thank you for it.