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cheejiburga OP t1_j2fpaa2 wrote

Reply to comment by AdditionalAttorney in I want to start saving and investing, but I have no idea what I'm doing and reading all this information is giving me whip-lash by cheejiburga

I have one so far, lol. If the limit or IRA'S is $6,000, then how do you place more? By having more IRA accounts? And if so, can you combine them?

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magnolia888 t1_j2fpknk wrote

You can have as many IRA accounts as you want. But the contribution limit is for ALL IRAs. Once you contribute $6000 to any of them, that’s it for the year.

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cheejiburga OP t1_j2fqia7 wrote

So for example, if I contribute $6k in my IRA in 2023, in 2024 I can add more money?

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k_lena t1_j2frgfz wrote

You can make an IRA contribution for 2022 until tax day (April 18, 2023). And also - the 2023 IRA contribution limit is going up to $6500. (2023 contribution can be made between January 1, 2023 until tax day - April 15, 2924.)

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magnolia888 t1_j2fr5c7 wrote

Yes. You can contribute up to the maximum each year. Some people space it out through the year. Some people contribute a lump sum in January.

To make it even more confusing you have until April 15 (whatever tax day is) of next year to contribute for the previous year. So for 2022, you have until April 2023 to make a contribution. For 2023, you have until April 2024 to contribute.

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cheejiburga OP t1_j2ft8dz wrote

And the money from the previous year will roll over into the next?

Also I'm assuming if I start investing in an IRA I would have to include that in my taxes right?

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MarcableFluke t1_j2fq2oj wrote

You can't contribute more than $6k towards IRAs each year (at your age). If you want to contribute more towards retirement, you could use a 401k if your employer offers one. Otherwise, you would need to use a taxable brokerage account, which isn't tax advantaged.

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cheejiburga OP t1_j2fqvsc wrote

Can I use any type of taxable account? Or is there a difference?

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AdditionalAttorney t1_j2frny9 wrote

When you say any type what do you mean?

An investment account is an account like now checking is an account.

You can open that account at different brokerages like fidelity, vanguard, schwabb. And betterment. Those are all accounts not different types.

You can also open a Roth IRA at these brokerages

Similar to how you can open a checking account at Bank of America, ally, TD bank etc

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cheejiburga OP t1_j2ft1f0 wrote

I think I misread some stuff. I think I mean like, whatever is taxable. I read in the link up above that if I don't have access to a 401k to use a taxable account. Aren't IRA's considered taxable? Sorry if I'm making this more confusing..

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MarcableFluke t1_j2fsf85 wrote

What "types" are you talking about?

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cheejiburga OP t1_j2ftlad wrote

https://www.reddit.com/r/personalfinance/comments/1004djv/comment/j2ft1f0/?utm_source=share&utm_medium=web2x&context=3

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MarcableFluke t1_j2fug6g wrote

401ks and IRAs are special tax advantaged accounts that are intended for people to use for retirement. That's what the tax advantages are for.

A taxable brokerage is just an account that you use to invest money like you do with 401ks and IRAs, but there are no tax advantages.

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cheejiburga OP t1_j2fut4a wrote

Ohhh okay. So I guess it's dependent on the person, but would IRA's technically be best for retirement if you dont have a 401k?

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MarcableFluke t1_j2fwenx wrote

If your work doesn't offer a 401k, and you're not eligible for a Solo 401k (think business owner with one employee), then yes, an IRA is recommended for retirement savings

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cheejiburga OP t1_j2fwqzy wrote

Thank you lots! I don't think I'm eligible for a solo 401k, but I'll see!

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AdditionalAttorney t1_j2frg2o wrote

Looks like you got the answer below.

Keep em coming :)

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cheejiburga OP t1_j2fv4y5 wrote

I have another... lol.

Can you invest and have interest without the fear of potentially losing that money? Or do I just still not understand how investing works lmao

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