Why Your Younger Years Are the Best Time to Open a Roth IRA

When you're saving and investing for retirement, it's best to attack it from multiple angles. A 401(k) plan is the most popular type of retirement account because it's offered through employers, but it should only be one piece of the puzzle.

Another key piece to the retirement puzzle can be an IRA. Unlike a 401(k), IRAs are not employer sponsored and must be opened on your own. There are two types of IRAs: Roth and traditional. Both are great resources, but they offer different tax breaks that make sense for different points in your career.

With a Roth IRA, you contribute after-tax money and get tax-free withdrawals in retirement. You also contribute after-tax money into a traditional IRA, but depending on your income, your contributions may be tax deductible. For tax year 2022, the maximum you can contribute to an IRA (Roth and traditional combined) is $6,000, or $7,000 if you're 50 or older.

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Source Fool.com