Your Roth IRA Checklist – Are You Missing Out?

Hey,

If you’ve ever heard someone say, “You should really open a Roth IRA!”... and then quietly wondered:

“Wait… what actually is a Roth IRA?”
“Should I have one?”
“Am I already too late?”

"But I already invest in my 401(k), isn't that enough?"

This is for you.

Retirement planning can feel heavy when it is buried under complicated rules, acronyms, and fear of getting it wrong. So let’s make it clear and calm.

A Roth IRA is one of the simplest and most powerful ways to grow your wealth tax free. But it only works if you start and use it intentionally.

Below is your practical 2025 Roth IRA Checklist. Think of it as your next step toward a future that feels steady and flexible. This is a wordy email (there's a TL;DR at the end), but filled with invaluable information that most people don't know.

No jargon. No shame. Just clarity.

✅ Your 2025 Roth IRA Checklist

1. Choose Where to Open One

You do not need a perfect provider. What matters is a trusted option with low fees and an interface you feel comfortable using.

I personally recommend M1 Finance if you want a simple robo-advisor that will invest and rebalance your account for you. It costs $3/month if you have under $10,000 invested and is free when you pass that amount.

If you prefer a traditional approach, Fidelity, Vanguard, or Charles Schwab are all solid choices.

Opening the account usually takes about 15 minutes. You will need your Social Security number, basic personal information, and your bank details. Some Roth IRAs will have a minimum deposit to open the account.

2. Know This Year’s Contribution Limits

For 2025, you can contribute up to $7,000 if you are under 50. If you are 50 or better, you get an extra $1,000 catch-up amount.

If that feels like too much right now, start with a smaller automatic amount. $50-$100 a month is still progress. Small steps add up.

3. Make Sure You Qualify

Roth IRAs have income limits. For 2025:

Single filers: phase-out begins at $146,000.
Married filing jointly: phase-out begins at $230,000

If your income is above the limit, you might still contribute through what is called a backdoor Roth. This just means using a specific strategy with extra steps, so speak with a tax professional if you want to set it up.

4. Understand Roth vs. Traditional IRAs

One question matters most:

Do you want to pay taxes now (Roth) or later (Traditional)?

How to Decide

✅ Choose Roth if:

You expect to be in a higher tax bracket later (common for young investors)
You love the idea of tax-free growth (Yes, really. $0 taxes on withdrawals!)
You might need to access your contributions early (Roth allows this penalty-free)

✅ Choose Traditional if:

You expect to be in a lower tax bracket in retirement
You need tax relief today (deductions now = lower taxable income).

Below is a graphic that shows how a Roth IRA and a Traditional IRA compare with an initial contribution of $6,000. Notice how the blue line (Roth IRA) starts slightly lower than the yellow line (Traditional IRA). That is because you pay taxes on your $6,000 upfront before you invest in a Roth, while with a Traditional IRA you invest the full $6,000 pre-tax.

Over time, both accounts grow at the same rate. If your tax bracket stays exactly the same when you withdraw at age 59 and a half, both accounts would give you the same ending balance. The Traditional IRA looks larger before taxes, but once taxes are applied at withdrawal, the balance matches the Roth IRA.

The key difference is what you expect your future tax rate to be. For many people, especially younger investors, your tax bracket may be higher when you retire than it is today. That makes the Roth IRA so powerful — you pay taxes now, grow your money tax-free, and keep every dollar of your growth later. Check out the graphic below to see this in action.

Rule of thumb: If your tax bracket is 24% or lower today, a Roth IRA is usually your best choice. If your tax bracket is 30% or higher, it often makes sense to choose a pre-tax option like a Traditional IRA or 401(k).Many people use both to balance their tax savings now and later.

I know this can feel like a lot to compare. If you feel stuck, start with a Roth. Or reach out to me — I am always happy to help you figure out which option makes sense for you. The most important step is getting started. (Graphics source article).

5. Automate Your Contributions

Consistency is more powerful than trying to time the market. Set up an automatic transfer from your checking account every month. This builds a habit and keeps your plan moving forward, even when life is busy.

If you want to be purely mathematical, the best move is to invest your entire contribution at the beginning of the year so it has the most time to grow. But for most people, putting in $7,000 all at once is not realistic.

Weekly or monthly contributions are a steady, realistic way to keep building without stress. The important part is that you keep going - your future self will thank you for every bit you put in today.

6. Invest the Money You Contribute

This is where the real power comes in. A Roth IRA is not just a savings account. Your contributions will not grow if they stay in cash.

One of the best choices for beginners (and anyone!) is a simple, broad S&P 500 index fund. This one fund gives you ownership in hundreds of the biggest companies. Over a 30 year period, the S&P 500 outperforms more than 99% of "expert" Wall Street stock pickers. Simple usually wins (and it's better for our stress-levels too!).

Watch this short video segment from Veritasium (one of my favorite creators for non-money topics) where he explains how Warren Buffett famously challenged "expert" stock pickers back in 2006. The financial part of the video ends around the 11-minute mark, but feel free to watch the whole video if you are curious!

7. Remember Your Roth’s Flexibility

One of the biggest hidden benefits of a Roth IRA is access to your own contributions. You can withdraw any money you put in at any time without penalties or taxes (since you already paid those). Only the growth needs to stay in until you reach age 59 and a half to stay penalty-free.

Unlike a 401k, this makes a Roth IRA a surprisingly flexible backup if life throws you a curveball.

It should go without saying, but to optimize your returns, one should never withdraw early if they don't have to.

8. Lastly, Check Your Beneficiaries

Life changes. Make sure your Roth lists the right beneficiary. This only takes a few minutes but protects your money for your family or loved ones.

🌱 A Calm Reminder

You do not have to max it out to do it right. What matters is that you take one step, automate what you can, and stay steady over time.

If you ever need to pause or scale back your contributions during a life transition, that is fine too. The structure you build now will be ready for you when you can raise the sails again.

TL;DR – Roth IRA Checklist

✅ Grow your money tax free for life
📌 Open an account with M1 Finance, Fidelity, Vanguard, or Schwab
💸 Contribute what you can - small amounts build big habits
🔁 Automate it and make sure you actually invest it (S&P 500 is a simple choice)
⚖️ Rule of thumb:
- Tax bracket 24% or lower → Roth IRA
- Tax bracket 30% or higher → Pre-tax (Traditional IRA or 401k)
- Many people use both over time
🔓 Your contributions are yours - withdraw what you put in anytime with no penalty
🚀 The most important step is starting

Before You Go…

If someone came to mind while reading this, maybe a friend, sibling, or coworker who's trying to figure out their retirement funds, forward this email to them. You never know how helpful it could be.

Also, I’d love to hear from you:

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Just hit reply and let me know. This newsletter is for you, and your questions help shape what comes next.

To steady habits and flexible plans,