Hi Future,
You have found yourselves with a bit of cash. Not a lot, but a little more than you need to survive. Here is what I suggest. Go on an amazing Stay-cation and open a IRA account. It’s easy, smart and it can be fun. Things you need to know:
1. Where does one do this? This is easy. Walk into a bank or a brokerage office such as Charles Schwab or Fidelity and talk to client rep who will get an account opened for you very quickly. Or you can go online at a brokerage firm and open an account in cyberspace.
2. Do you need to put a minimum amount in the account? NO. Although, maybe. I’ve seen places that want $1,000 minimum. However, you do need to keep the maximum amount at $5,500 per year. Also – there are incentives being offered out there at the moment. Open an IRA account and get $600…… Go online today and get this done!
3. When do you need to get this done by to take advantage of the tax deduction for 2013? You can open an IRA anytime before you file your taxes for the previous calendar year. So you have until April 15th, but get this done this week then treat yourself to some tater tots.
4. What is this tax advantage of which you speak? Basically, whatever you contribute to the IRA account, you get to subtract from your GROSS income for tax purposes. It’s like you made less money for tax reasons. It’s really great!
Just remember that the money you contribute is not for spending before retirement. If you take your money early, it will be painful in terms of penalties and taxes. So putting away less might be a good idea. You’re still young and will want to buy things, like condo’s and cars and things you need for everyday living. Good luck and happy investing. More to come…..
Invest Gen Y 