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Monday, April 17, 2006 

Contributed to My Roth IRA for 2005

Other than filing my taxes last Friday I made a contribution of $4,000 to my Roth IRA account. Between paying my federal and state tax bills and couple of other expenses, things started to get little tight so I decided to use cash sitting in my taxable investment account for this contribution. After this contribution my balance in Roth IRA stands at $11,364.28, currently all of it is invested in Vanguard 500 Index Fund at Vanguard. Considering that all your earnings in Roth IRA are tax-exempt, and if a need arises it allows you to withdraw your contributions without any tax or penalty anytime, I see no reason why one shouldn't put money in Roth IRA (only exception could be 401(k) accounts where your employer makes a matching contribution). Since you are allowed to contribute only small amount every year towards your Roth IRA, and if your earnings go up in future, due to income limitations you may not be be able to contribute to it, it should be wise to open a Roth IRA as early as possible in your career. Today is the last day to make a contribution for 2005.

Click here and here to find out more about Roth IRA or compare it with other retirement options.