[Kanako]

Hello. Asking for a friend.
She is late 40’s. Single and her kid is 20’s so no need to finaically support her.

She has annual income of 10-20k. (She can’t work more due to sickness.)

Her employer doesn’t offer 401K.
She would like to start investing for retirement even if it’s going to be only $100 a month.

Can she open Roth IRA even low income? If not, what shall she do?

[Debby]

She can open a Roth IRA with $25 at Edward Jones.

[Travis]

At that income Roth or straight brokerage it may not make that big of a difference. So, if she does qualify for a Roth, that’s great.

But don’t let that stop her from investing if not.

[Paula]

She can open and invest in a Roth IRA as long as she has earned income for the year.

[Susan]

She can contribute up to $7,000 for 2024 to a Roth IRA, or $8,000 if she is over 50.

She cannot contribute more than the amount of her earned income for the year.

[Caro]

If it were me, I would open a Roth with Fidelity and invest in VTI.

[Jubilee]

She should also look into the savers credit for the tax credit available for low income contributors to their Roth IRA

[Engelbert]

Even with a limited income, investing in a Roth IRA has some major perks. Contributions are made with after-tax money, meaning any growth or future withdrawals are tax-free, which could give you a big boost in retirement.

Plus, unlike other retirement accounts, you can withdraw your contributions (though not the earnings) without penalties if you ever need extra cash, making it a flexible option.

Starting small, even just $10 or $20 a month, can build up over time thanks to compounding interest.

It’s a great way to start securing your future now, bit by bit.

[Author]

Posts