I maxed out my Roth IRA last year!


I told you this picture would be back!  As you know, I focus on writing about happiness on this blog.  In general, I try to focus on three big ideas: financial security/frugality, health, and personal relationships.  As you can probably guess from the title, this post is about the first of these.  You might recall that I recently wrote an article about how I think it is a good idea to max out a Roth IRA before you turn 30.  I also wrote an article back in August where I said that I wanted to max out my IRA by tax day this year (just fyi, the maximum annual contribution is $5500 right now).  Well I put the final $500 into my IRA this month, officially maxing it out for the 2013 tax year.

I’m pretty pumped up about this.  When I was about 22-23 I told myself that I would have an IRA started by 25.  That didn’t happen.  I ended up opening one late in 2012 when I was 27.  I didn’t put that much into it that year, but I made it a serious goal to contribute the full $5500 in 2013.  Here’s the breakdown of how much I contributed each month:

  • January: (contributed to tax year 2012)
  • February: (contributed to tax year 2012)
  • March: (contributed to tax year 2012)
  • April: (contributed to tax year 2012)
  • May: $200
  • June: $0
  • July: $200
  • August: $500
  • September: $300+$400 = $700
  • October: $0
  • November: $500+$500+$400 = $1400
  • December: $800+$600 = $1400
  • January (2014): $600 (contributed to tax year 2013)
  • February (2014): $500 (contributed to tax year 2013)

There you have it.  A grand total of $5500.  You’ll notice that from Jan-Apr of 2013 I was contributing to the 2012 tax year.  The reason for this is that until April 15 (tax day), you can continue to contribute to the previous year’s contribution limit if you haven’t maxed it out.   In other words, since I hadn’t put the full $5500 into the account in 2012, I didn’t have to use up my 2013 contribution until after April 15.  A similar situation happened in Jan and Feb of this year.

I also wasn’t as disciplined as I would like to have been.  As you can see, my contributions were pretty erratic and I really had to play catch up late in the year.  I’m glad I had publicly stated this goal, because it would have been really easy to talk myself into “needing” that money late last year.

I am really happy to have met this goal.  To give you some perspective, I made about $23,000 last year, so being able to save $5500 is a HUGE win for me.  My income should be going up pretty drastically in the next 6 months (a post about this coming soon), so hopefully the financial security side of my happiness will be easier to come by in the next few years.

I would like to continue to max out my IRA (Roth or Standard) in the future.  And hopefully with my new income I’ll be able to do so with a regular contribution of about $450 a month, rather than $0 here and $1400 there.

Anyway, I hope this post provides you some motivation to either open up an IRA if you don’t have one, or max it out by April 15 if you do.  I’ve also been playing around with some new recipes, so you can expect a `Stir-Friday!’ post coming up soon.

Do you have an IRA? Are you planning on maxing it out, or opening one, by April 15th?


2 thoughts on “I maxed out my Roth IRA last year!

  1. DivHut

    It’s great that you maxed you your contribution. I think many people do not take full advantage of these tax benefit accounts. Anytime you can max it out it’s a good thing. Keep at it. Put some of that money into dividend paying stocks and let the money compound over time.

    1. thehappypotamus Post author

      I agree that more people should be taking advantage of their tax-advantaged accounts. Granted, I haven’t been very good about it until recently, but I’m making a serious effort to correct that. Thanks for the encouragement, and thanks for stopping by.


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