Here in 2020, nothing is certain. I could reference some things that might make your blood pressure rise for one reason or another, but let’s just skip to the helpful stuff. Saving money is always important and especially so these days. Hopefully your emergency fund is in good shape and you’re taking advantage of your company’s 401k. But what about an IRA? I’ve often talked a lot about the benefits of compound interest, so what is it that’s preventing you from opening up an IRA? If there’s something holding you back, here are three myths that could be the reason you have never taken the opportunity to open one …
You’re not allowed to have that many retirement accounts: If your 401k is the reason you haven’t opened an IRA, it’s time to stop letting that stop you. You can most definitely have both. There are, however, some rules that could effect your tax deduction for a traditional IRA, so just make sure you read up on that first.
You make too much money: While you can make too much for a Roth IRA ($206,000 or more if you’re married and filing jointly or $139,000 for single filers for the tax year 2020), there’s no such rule for Traditional IRAs.
You can’t touch your money until your retire: Well look, you definitely shouldn’t be looking to withdraw your money early, but it’s definitely not impossible to do so. While you may be subject to a 10% penalty, there are exceptions to that rule.
If any of these were your reason to not open an IRA, maybe you should rethink that decision, call up your financial advisor, and get the ball rolling!