The Best, Most Boring Piece of Advice I Could Ever Give You

Okay, I’m going to give you some advice and it’s going to be REALLY boring. Like, you will hate me for how boring it is. But it’s really good advice, and probably nobody else is going to give it to you. I'll preface this by saying I am NOT an expert, just a normal person who’s done some research, so you should do your own research, too. Here goes.

Open a Roth IRA and put some money in it.

A Roth IRA is a retirement account. And I know what you’re thinking — you aren’t even going to live to be old, so who cares? Honestly shut up with that right now. You probably are going to be old someday, and when you’re old you’re going to want some money. And the good news is that whatever money you put into a Roth IRA right now is going to be a LOT MORE money later.

You can put in as little as you want, or up to $5,500 a year

The maximum you can put in every year is $5,500, or the amount of money you make in a year, whichever number is lower. You don’t have to put that much in. (If you make $2,000 a year babysitting, you can put in $2,000, but not more.) You can put in $50. A Roth IRA is a much better place to put your money than a savings account.

Use this calculator to see how much your money could be worth when you retire:

What’s super awesome about a Roth IRA is that you pay your taxes upfront, so when you take the money out, you get to keep all of it. A 15% tax on $1,000 is way, way less money than who knows how much tax on $80,000 or whatever it might be when you take it out. Imagine yourself with all this money. Doesn’t that sound amazing? This is why you should put some money in a Roth IRA.

Not JUST for retirement

Want some more good news? While keeping your money in until retirement will result in the best payout, you can take your money out without a penalty for a few other reasons. You can take out $10,000, penalty-free, to buy your first house. You can even take out money to pay for college – there’s no penalty but you do have to pay taxes on it. If it’s been less than five years since you put your money in, you can take out the original amount you put in as your contribution no problem, but you need to wait five years to take out any extra money you earned.

You can do it yourself

If your parents want to help you, awesome. But you don’t need them to – you can do this by yourself. Just find a company you want to use, and look for one with low investment minimum and management fees. Betterment has a $0 minimum, so you could put $5 in if you want.

I know this was really boring. But your parents probably aren’t thinking about your retirement fund while you’re still a kid, and if you wait until you're 30 or something, you'll have way less money than if you started now! If you put your Christmas money in a Roth IRA right now, you can have a chance at actually retiring someday. You’re not too young – the younger you are, the more money you’ll end up with. Think you'll try it? Tweet at me and let me know @erikaheidewald!