End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies

Dec 16, 2024

In this discussion, investing expert Sam Taube shares insights on maximizing Roth IRA contributions and correcting over-contribution mistakes. Hosts Sean Pyles and Sara Rathner explore 'lazy' money management tactics like automating investments for easy growth. They highlight the importance of year-end contributions and discuss strategies for setting up a backdoor Roth IRA. Listeners learn about income limits, penalties for over-contributing, and smart ways to enhance retirement savings just in time for tax season!

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ADVICE

Lazy Investing

Automate monthly investments into a brokerage account.
Use dollar-cost averaging and invest in index funds, ETFs, or target-date funds.

ADVICE

Savings Buckets

Create separate savings accounts for different financial goals.
Automate transfers to these "buckets" to simplify saving and budgeting.

ADVICE

Roth IRA Contribution Limits

Be mindful of Roth IRA contribution limits based on your income.
Excess contributions can incur penalties, so check the IRS guidelines or consult an accountant.

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Discover how to embrace “lazy” money management, maximize Roth IRA contributions and fix over-contribution mistakes.

How can you passively grow your money? What should you do if you over-contribute to a Roth IRA? Hosts Sean Pyles and Sara Rathner discuss lazy money-management strategies and Roth IRA over-contribution fixes to help you stay on top of your finances with minimal effort. They begin with a discussion of "lazy" personal finance tips, with actionable advice on automating investments, leveraging savings buckets, and using target-date funds for hands-off financial growth.

Then, investing expert Sam Taube joins Sara and co-host Elizabeth Ayoola to discuss managing Roth IRA contributions, especially for those who may have over-contributed. They explore strategies to fix over-contributions, steps for setting up a backdoor Roth IRA, and how to maximize retirement contributions before tax deadlines.

Find your next Roth IRA account on our Investing Nerds’ list of the best Roth IRA accounts: https://www.nerdwallet.com/best/investing/roth-ira-accounts

See how your savings and investment account balances can grow with NerdWallet’s free compound interest calculator: https://www.nerdwallet.com/calculator/compound-interest-calculator

Here is the IRS’ guide on the amount of Roth IRA contributions that you can make for 2024: https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2024

In their conversation, the Nerds discuss: lazy money management, Roth IRA over-contribution, backdoor Roth IRA, automating investments, savings buckets, target-date funds, passive investing, retirement contributions, dollar-cost averaging, financial autopilot, how to fix Roth IRA over-contributions, Roth IRA contribution limit, personal finance podcast, investment mistakes, investing for beginners, retirement planning, retirement savings, tax penalties on Roth IRAs, how to manage finances, savings accounts strategy, budgeting tips, financial organization, avoiding Roth IRA penalties, fixing retirement account errors, best investment strategies, personal finance tips, financial independence, smart money management, lazy ways to save money, easy investment strategies, financial automation, retirement fund mistakes, high-yield savings accounts, joint accounts vs individual accounts, managing childcare expenses, CFP financial advice, IRA custodians, tax filing tips, maximizing retirement contributions, financial stress relief.

To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email podcast@nerdwallet.com.

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