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2023 Roth IRA Rules: What You Need to Know

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Roth IRA Rules in 2023

A Roth IRA is a type of individual retirement account that allows for tax-free withdrawals in retirement in the United States. In 2023, the contribution limit for a Roth IRA is $6,500 for those under the age of 50 and $7,500 for those 50 and over. There are many benefits to having a Roth IRA including no minimum distribution and no taxes on any gains. Contributions to a Roth IRA are made with after-tax dollars and qualified withdrawals, including earnings, are tax-free. There are income limitations for contributing to a Roth IRA, and early withdrawals may be subject to taxes and penalties. It’s important to understand Roth IRA rules and requirements in order to make informed decisions about saving for retirement.

What Is A Roth IRA

A Roth IRA is a retirement account that offers you a tax benefit when you retire. Unlike traditional IRAs and 401(k) plans Roth IRA contributions are not tax deductible but you also do not pay taxes when you withdraw money at age 59 ½ +.

Roth IRA Contribution Limits 2023

The 2023 Roth IRA contribution limit is $6,500 for the year. If you’re 50 or older you can contribute up to $7,500 for the year. These contribution limits increased by $500 compared to 2022. So, if you haven’t contributed to your Roth IRA in 2022 yet, you can still contribute up to $6,000 or $7,000 if you’re 50 or older before April 15th. The amount you contribute also cannot exceed what the IRA defines as “earned income” or taxable compensation. This includes wages, salaries, tips, commissions, professional fees and self-employment income. Charles Schwab shares more details here on what’s considered earned income for a Roth IRA.

The amount you contribute to a 401(k) plan does not impact the amount you can contribute to a Roth IRA but the amount you contribute to a Traditional IRA will affect the amount you can contribute to a Roth IRA. If you contribute to both a IRA and Roth IRA in the same year, the total contributions to both of these accounts cannot exceed $6,500 if you’re under 50, or $7,500 if you’re 50 or older.

Setting Up A Roth IRA For A Child

You can also set up a custodial Roth IRA for your child, subject to the same contribution limits outlined above. This means that contributions for your child’s Roth IRA you control cannot exceed what your child earned in 2023.

Roth IRA Income Limits 2023

There are income limits on Roth IRA eligibility which is why it’s important to start your contributions to a Roth IRA the first year you get a W-2. If you are single, and your modified AGI is $138,000 the amount you can contribute to a Roth IRA begins to phase out. You cannot contribute to a Roth IRA in 2023 as a single filer if you make more than $153,000.

If you are married filing jointly and your AGI is $218,000 or above the amount you’re eligible to contribute begins phasing out. If you are married filing jointly you cannot contribute to a Roth IRA if you make more than $228,000 in 2023. Once you exceed this income you will need to explore options to setup a backdoor Roth IRA if you’re interested in having a Roth IRA. To take full advantage of a Roth IRA, set up a Roth IRA when you first start collecting a paycheck. You never know when you may get to the point where your income makes you ineligible to contribute to a Roth IRA.

Here are the contribution limits by income and filing status for a Roth IRA in 2023:

roth ira rules 2023, roth ira 2023 contribution limit
Source: IRS

When Can You Contribute to a Roth IRA

Contributions to a Roth IRA can occur at anytime during the year. You may contribute the full amount all at once or contribute multiple times during the year up to the maximum. Once a new calendar year starts, you can still make contributions for the previous calendar year up until April 15th (when taxes are due). For example, you can make a contribution for 2022 to your Roth IRA until April 15, 2023.

Roth IRA Withdrawals

Since you’ve already paid taxes on your contributions, you can withdraw your contributions at any time with no restrictions. If you withdraw earnings on those contributions though, you may be taxed or penalized on withdrawing this money.

Roth IRA rules dictate that once you’re age 59 ½, as long as you’ve held the account for at least five years, you can take distributions on all money within the account and do not have to pay taxes on that money.

Roth IRA Minimum Required Distribution

With a Roth IRA there is no required minimum distribution. You don’t ever have to withdraw from this account if you don’t need to. Additionally, you can pass this money onto your heirs.

Affordable Self-Care: Cheap and Easy Ways to Take Care of Yourself

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affordable self care, self care on a budget

Self-care is essential for our overall well-being, but it can often feel like a luxury that is out of reach. With the high cost of spa treatments, beauty products, and other self-care items, it can be difficult to find ways to take care of ourselves that fit within our budget. However, self-care doesn’t have to be expensive. There are many ways to practice self-care without breaking the bank. In this post, we will explore some budget-friendly self-care tips and tricks that will help you feel refreshed and rejuvenated without spending a fortune. So, take a deep breath and let’s get started on our journey to affordable self-care.

Exercise

The American Heart Association recommends 150 minutes of moderate intensity aerobic activity a week. Now, it’s easier than ever to exercise in a way that fits your budget. There are even plenty of options to work out at home, no matter how small your space is including:

Fitness doesn’t have to mean the expensive gym membership. What is worth it really depends on the value it provides to you. The $200/ month gym membership is worth it if it motivates you to frequently work out and you feel better. The $10 / month gym membership is not worth it if you never go. Some companies even offer wellness benefits to help make exercise even more affordable.

Be Mindful of What You Eat

Part of self-care at home is eating well. Make the choice to eat healthier as often as you can. NBC News pulled together this list of what food to stock up on in your fridge and pantry. It’s healthier to eat at home than it is to eat out and you can control the amount of salt and butter you add to dishes. At the same time, when you’re stuck at home it’s easy to graze on unhealthy snacks all day instead of sticking to a healthy meal schedule.

Try your best to eat a regular meal schedule and not graze on snacks throughout the day. Since fresh fruit and vegetables are harder to come by with less frequent grocery shopping make sure to frozen fruits and veggies instead. Most are flash frozen instantly and are just as healthy as fresh fruit! There are also health benefits for drinking tea, especially green tea.

If you’re not sure what to cook, try these recipes using common pantry and fridge staples.

Have A Home Spa Day

Bring the spa to you! An at home spa day is a great way to practice affordable self-care. Taking a relaxing bath is a great cheap and easy way to start your at home spa day. I love to relax using Dr Teal’s Lavender Epsom Salt Bath. A 3 lb bag will normally cost between $5-6. Make sure to take a rinsing shower after taking an epsom salt bath as salt can dry out your skin. Light a nice candle and play music in the background.

Miss getting a mani/ pedi? A foot peel is a great activity for when you have to stay at home for a week or more because your feet may peel a lot. It removes dead skin and in my opinion is way more effective at removing the dead skin than a pedicure is. I’ve personally used the Baby Foot Peel. The price varies on Amazon, but I’ve usually found it for $20- $25. I found the reviews to be very helpful in making the peel most effective. This includes soaking your feet before you do the peel for at least 30 minutes, putting socks over the booties to help your feet absorb more product and soaking your feet every night for 10-15 min for the following week.

Step Outside and Enjoy the Sun

Spending some time in the sun has many benefits for our physical and mental health. One of the most well-known benefits is that the sun’s ultraviolet (UV) rays can help our bodies produce vitamin D, which is essential for strong bones and teeth. Vitamin D also helps to regulate the immune system and may protect against certain cancers. Various studies have also linked low Vitamin D levels to diseases other than cancer, raising the possibility that vitamin D insufficiency is contributing to many major illnesses. Sun exposure can also improve mood and energy levels by increasing the production of endorphins, which are chemicals that make us feel good. Additionally, being in the sun can help to regulate our sleep patterns by resetting our circadian rhythm, which controls when we feel awake and sleepy. This can be particularly beneficial for people who have trouble sleeping or suffer from seasonal affective disorder (SAD).

Read a Book or Listen to A Podcast

Reading, or listening to a podcast, can be a great way to practice affordable self-care. Not only is it an inexpensive activity, but it also can be a great way to relax and unwind after a long day. It can help distract us from our worries and provide a sense of calm. Reading can also be a great way to improve cognitive function, as it exercises our brains and helps to improve memory, focus, and concentration.

To practice self-care on a budget through reading, you can take advantage of your local library. Many libraries have a large collection of books in different formats, such as e-books and audiobooks, which can be borrowed for free or for a minimal fee. Kindle books can even be borrowed from your local library directly from your home. You can also find books for free online through Project Gutenberg.

Travel on a Budget

Traveling doesn’t mean spending thousands of dollars to get away. In fact, travel can mean driving an hour away to explore a local destination. Traveling on a budget can offer many benefits, both for our personal growth and for our wallets. Additionally, traveling on a budget can also be a great way to discover hidden gems and off-the-beaten-path destinations. You can enjoy local, authentic food, and meet new people. Instead of sticking to popular tourist hotspots, you’ll be able to explore more unique and authentic places. Make travel affordable by using these travel hacks to travel for less.

Practice Gratitude

Practicing gratitude is a powerful way to improve mental and emotional well-being. Take the time to appreciate and acknowledge the good things in life, no matter how small. When you focus on the positive aspects of your life, you shift your attention away from negative thoughts and feelings. This can help to reduce stress, anxiety, and depression. It’s also a great way to build resilience and increase overall satisfaction with life. To practice gratitude, you can start a gratitude journal where you write down three things you are thankful for each day. You can also take time to reflect on the things you’re grateful for before going to sleep at night or when you wake up in the morning. Another option is to share your gratitude with others, whether it’s by expressing appreciation to a loved one or showing your appreciation through charity. Incorporating gratitude into your daily routine can help you to build a more positive mindset and live a more fulfilling life.

Spend Time With Family and Friends

Socializing with loved ones is a great way to boost your mood. Studies have shown that people who have strong social connections have a reduced risk of developing depression and anxiety, as well as lower rates of stress. Additionally, spending time with friends and family can provide a sense of belonging and community, which can be essential for our overall happiness and satisfaction with life. Plan activities like picnics or potlucks that are easy on the budget.

Affordable Self-Care Summary

In conclusion, self-care is an essential part of maintaining our overall well-being, but it doesn’t have to be expensive. There are many ways to practice self-care on a budget, from taking a relaxing bath to going outside and soaking in the sun, exercising, reading a book, cooking a healthy meal, practicing gratitude, spending time with friends and family, having a spa day at home. You don’t have to spend a lot of money to take care of yourself, you just need to get creative and find ways to make self-care a priority in your life. Remember, self-care is not a luxury, it’s a necessity. So, take the time to prioritize yourself and your well-being today, and you’ll be amazed at how much better you’ll feel.

Affordable Self-Care: Cheap and Easy Ways to Take Care of Yourself

Why Learning to Code is a Valuable Investment for Your Career and Future

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why you should learn to code

Learning to code is a valuable skill that can open up a wide range of opportunities in today’s digital world. Whether you’re looking to become a software developer, data scientist, or simply want to automate tasks and solve problems more efficiently, coding is a powerful tool that can help you achieve your goals. Additionally, coding is in high demand in the job market and learning to code can lead to better job prospects and higher earning potential. Furthermore, coding can also be a fun and rewarding hobby that allows you to create and build things from scratch. Overall, learning to code is a valuable investment that can provide job security, increased employability, higher earning potential, the ability to create and flexibility.

Automation Will Change The Jobs Available

While no one knows exactly how many jobs are at risk of being automated, one study by the McKinsey Global Institute estimates up to 800 million jobs could be automated by 2030. Though automation has the potential to destroy jobs, it also has the potential to create jobs. New job opportunities are created in areas like programming, data analysis and technical support.

It is difficult to predict how automation will affect the job market in the future, so it’s best to start planning now and learning new skills that will be in high demand, like coding. This way, you are prepared to adopt to a changing job market.

Not sure how to get your foot in the door at a technology company? Hear these tips for getting a job in IT from 10 technology professionals who used creative ways to get their first technology job.

Increased Employability

Tech companies have had a lot of openings over the past few years for programmers. And, while tech has dominated recent headlines with layoff news there are still a ton of software engineering jobs posted on Indeed. It’s also not just technology companies that hire coding skills. Many industries rely on technology and are also in need of skilled programmers. Learning to code can increase your competitiveness in the job market and open up new employment opportunities.

Coding Skills Offer Higher Earning Potential

Due to the demand for these skills, programmers and other professionals with coding skills often command a higher salary. According to the US Bureau of Labor Statistics, the 2021 median salary for Software Developers, Quality Assurance Analysts and Testers was $109,000. This is compared to an average salary of $58,000 in the US in 2021 according to the Social Security Administration. With coding skills, you have a likelihood of RSUs (restricted stock units), or equity in a private company. Not only will you have a higher earning potential, but you may also have better access to corporate benefits.

The Ability To Create

One of the most compelling reasons to learn how to code is the ability to create. With coding skills, you have the power to bring your ideas to life and build something from scratch or add a cool new feature to something existing. Whether it’s a website, mobile app, game, or software program, the possibilities are endless. Coding allows you to design and develop your own projects, and bring your vision to reality. Additionally, coding gives you the ability to customize existing tools and software to better suit your needs and make your work more efficient. The ability to create and build things is a powerful incentive to learn how to code.

Coding Skills Enable Flexibility With Your Location And Time

Having in demand skills offers you more flexibility. It’s easier to negotiate a remote or hybrid work schedule. And, many of these jobs are remote or hybrid already. You can become more entrepreneurial and help bring someone’s idea to life. In regards to companies, you can be your own boss and freelance, work for a startup or large corporation.

Learning to code can be a challenging and time-consuming process. However, the increased employability, higher earning potential, ability to create and flexibility make it worthwhile to learn how to code.