Why I Never Contributed To A Roth IRA But Why You Probably Should

My dad is in his 70s and he mentioned he wish he’d started a Roth IRA when he was young. When you’re in your 70s, you must take required minimum distributions from your pre-tax retirement savings accounts and pay taxes. Given nobody likes to pay taxes, I empathized with his regret. It’s also a good idea to listen to your elders.

But I don’t have a problem paying taxes on income earned. It’s only when I have to pay a surprise tax where the liability wasn’t properly budgeted where I have a problem. This only happened to me once when the state of California passed a retroactive tax of 2.9% for the 2011 tax year.

I’ve been a long time opponent of contributing to the Roth IRA. However, now that I’m older and wiser, let me share some of my excuses and encourage you to contribute to a Roth IRA if you are eligible. 

Why I Never Contributed To A Roth IRA

1) I didn’t have much money left over. When I first got a job in 1999, I was only making a $40,000 base salary living in Manhattan. $40,000 did not feel like a lot of money back then, especially since I couldn’t even rent a one bedroom apartment on my own. Even splitting a studio apartment for $1,800 total required my brother-in-law to be a lease co-signer. In NYC, you needed to make at least 40X the monthly rent in annual salary, and my roommate and I did not make over $72,000 combined.

After maxing out my 401(k) to

Keep reading this article on Financial Samurai.