There is a Roth IRA Movement going on, all thanks to Jeff Rose, CFP® with his blog post and efforts to get others involved:
With this post, he has started an event that has drawn lots of attention with over a 150 financial writers all working together to share the same message:
OPEN A ROTH IRA AND MAKE CONTRIBUTIONS… Today!
Jeff shares a chart that illustrates the importance of saving at a young age by comparing two investors, which first caught his attention in his college finance course.
Saver 1: “Super Saver Parker”
Started saving at age 25 to a Roth IRA with contributions of $2,000 per year for 10 years. Super Saver Parker’s total contributions amount to $20,000.
Saver 2: “Super Slacker Saver”
Started saving at age 35 to a Roth IRA with contributions of $2,000 per year for 30 years. Super Slacker Sloane’s total contributions amount to $60,000.
Using the same assumptions as his charts, I quickly plugged the numbers into Silver Financial Planner to illustrate the results.
Illustration 1 – Saver 1: “Super Saver Parker”
With contributions of $2,000 per year from ages 25-35, assuming an 8% return, the Roth IRAs projected balance at age 65 is $327,359.
Illustration 2 – Saver 2: “Super Slacker Slone”
With contributions of $2,000 per year from ages 35-65, the Roth IRAs projected balance at age 65 is $254,432.
Even though Saver 2 contributed $40,000 more to the Roth IRA, thanks to Saver 1’s early contributions Saver 1’s Roth IRA account balance is projected to be worth over $70,000 more at age 65.
It is very interesting to read the variety of discussion topics when it comes to Roth IRAs. RothIRA.com has compiled a list of blogs posting articles on the Roth IRA movement:
Money Tree Software wants to thank Jeff Rose, CFP® for his energy and hard work to start this movement and we are happy to share it with our readers.