11/04/2022
Can earning too much money actually hurt your chances of retiring in comfort?
While "wealth" and the definition of a comfortable life are both relative, the more money you can potentially save, and obviously the more money you will need to save to achieve "the lifestyle you've grown accustomed to," the more people fall into the trap of "I'm maxing out my IRA account, I must be saving enough."
Unfortunately, you cannot contribute to an ROTH IRA at all if you earn too much money. (The 2019 ROTH IRA income restrictions for singles and married couples are $135,000 and $199,000, respectively.)
Similarly, the $6000 annual contribution maximum (or $7000 for individuals 50 years or older) will not be enough to completely support the kind of retirement you're likely to want if your yearly salary is $100,000 or more. You would never be able to accumulate enough savings for a safe retirement, even if you maxed out your Roth IRA. at the very least on this basis.
What you do after your ROTH IRA account runs into the wealth eligibility roadblock could leave you exposed financially in retirement. At this point, you ought to think about hiring a freelance financial advisor.
Now is the time to review your current situation with a financial consultant who can help you identify areas in your investment strategies that could leave you vulnerable to high taxation, market volatility, or high maintenance fees before you are guided into another financial investment or bank product.
Reenu Cherian is a financial adviser and international best-selling author who specializes in retirement planning, estate planning, and developing tax-efficient financial plans.
Financial stability, often, more times that not, happens when you don't try to do this alone. Often when trouble is on the horizon its from either not having a knowledgable financial advisor assisting them properly.
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Retire well my friends. You deserve it.
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