Would you still open up a Roth IRA account at 27?

At 27 years old would you still open up a roth ira account if you already have a savings account of 1.5% APY? I know better late than never but would it actually be beneficial to put my money elsewhere at this point or is it still worth opening a roth ira account?

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  • Amy
    Lv 7
    1 month ago

    If your employer matches 401(k) contributions, then you should invest there first. If you have a high income that puts you in a high tax bracket, consider a traditional IRA instead of a Roth (but also consider what the brackets might be in the future).

    But for the typical 27-year-old at a fairly early point in their career ladder, a Roth IRA is usually the best choice.

    At 27 you still have about 40 years before retirement, and then 20 more years to live in retirement. You want your investment income to be tax-free through each of those years.

    Even if you invest in a money market fund that only earns 1.5% like your savings account, you avoid paying tax on that 1.5% compounded every year. 

    But for long-term savings, you should invest in something that keeps up with inflation (2 to 3% per year). 

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  • 1 month ago

    What,

    27 years old is hardly old.

    27 is not too late for anything really.

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  • 1 month ago

    It's always worth it to diversify your holdings--and a Roth is a great way to do it. Don't put it all in the Roth--keep some in the savings for liquidity. But heck yeah--go ahead and do the IRA. By the time you're ready to retire you will have a busload of money and no taxes! (Keep contributing to that IRA until you do retire!)

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  • Judy
    Lv 7
    1 month ago

    lol.  yes.  at 27 you'r a long way from retiring.

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  • 1 month ago

    I would open a Roth IRA at any age.

    Someone once said the best time to plant a tree is 20 years ago, and the second best time is today.

    The same logic applies.

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  • 1 month ago

    A savings account, regardless of the interest is some place you put money that is in your emergency fund. 

    A Roth IRA should be bringing in 6+% annually...

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  • 1 month ago

    It's still worth it.  Especially because the savings account probably won't be at 1.5% much longer.  A lot of banks have been lowering their savings account rates.

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  • 1 month ago

    1.5% on your money is throwing it away.  Inflation is higher in the long run.  The idea of an IRA is to save for retirement.  What you are doing is barely better than digging a hole in your backyard and filling it with cans of cash.  27 is young for most people to start retirement savings.

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  • Anonymous
    1 month ago

    A roth idea is a good idea. It would have been better at 23 but 27 is fine.

    An IRA is a retirement account. Deposit $500 a month to a roth IRA for the next 35-38 years in a low fee S&P 500 index fund and you will probably have a million at 62-65.

    And because its a roth, you won't owe taxes on the gains. And the gains will be substantial. (You will have invested $210,000-228,000 but you will have a million)

    You won't get that from a savings account. Its called the magic or miracle of compounding.

    They did not have Roths when I started so I will owe taxes when I pull money from my IRA.  I retired young so I can no longer contribute to any IRA or I would do so.

    I max out an HSA but that was something I just started in recent years so it only has $24-25k.

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  • Bill
    Lv 6
    1 month ago

    If you have earned income and money to put in it, start a Roth IRA.  Buy shares in a good mutual fund in the Roth and let it ride. 

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