NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
16 Dec 2024
Discover how to embrace “lazy” money management, maximize Roth IRA contributions and fix over-contribution mistakes. How can you passively grow your money? What should you do if you over-contribute to a Roth IRA? Hosts Sean Pyles and Sara Rathner discuss lazy money-management strategies and Roth IRA over-contribution fixes to help you stay on top of your finances with minimal effort. They begin with a discussion of "lazy" personal finance tips, with actionable advice on automating investments, leveraging savings buckets, and using target-date funds for hands-off financial growth. Then, investing expert Sam Taube joins Sara and co-host Elizabeth Ayoola to discuss managing Roth IRA contributions, especially for those who may have over-contributed. They explore strategies to fix over-contributions, steps for setting up a backdoor Roth IRA, and how to maximize retirement contributions before tax deadlines. Find your next Roth IRA account on our Investing Nerds’ list of the best Roth IRA accounts: https://www.nerdwallet.com/best/investing/roth-ira-accounts See how your savings and investment account balances can grow with NerdWallet’s free compound interest calculator: https://www.nerdwallet.com/calculator/compound-interest-calculator Here is the IRS’ guide on the amount of Roth IRA contributions that you can make for 2024: https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2024 In their conversation, the Nerds discuss: lazy money management, Roth IRA over-contribution, backdoor Roth IRA, automating investments, savings buckets, target-date funds, passive investing, retirement contributions, dollar-cost averaging, financial autopilot, how to fix Roth IRA over-contributions, Roth IRA contribution limit, personal finance podcast, investment mistakes, investing for beginners, retirement planning, retirement savings, tax penalties on Roth IRAs, how to manage finances, savings accounts strategy, budgeting tips, financial organization, avoiding Roth IRA penalties, fixing retirement account errors, best investment strategies, personal finance tips, financial independence, smart money management, lazy ways to save money, easy investment strategies, financial automation, retirement fund mistakes, high-yield savings accounts, joint accounts vs individual accounts, managing childcare expenses, CFP financial advice, IRA custodians, tax filing tips, maximizing retirement contributions, financial stress relief. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices
Full Episode
Hey, Sean, would you describe yourself as lazy?
I would say that I'm unlazy to a fault. Like I'm always doing something, cleaning the house or reorganizing a cabinet or going for a run. My partner calls it my scurrying. And at any given moment, you can probably find me flittering about doing one thing or another. So no, I am not lazy. What about you, Sarah?
Sometimes, yes, I am. I love rotting on the couch as much as anyone, especially parents of young kids. You know what I'm talking about? After bedtime, couch rot time. It's great. I also make use of every moment I can get things done, either for work or around the house. But believe it or not, sometimes good things can come from being lazy.
And I'm not just talking about whatever you're watching on Netflix after your kids go to bed.
Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.
And I'm Sarah Rathner. This episode, I'm joined by our co-host, Elizabeth Ayola, to answer a listener's question about contributing to a Roth IRA when you're over the income limit, including when a backdoor Roth is a good idea.
But first, Sarah and I are going to talk about the virtue of laziness, even if it's something that does not come naturally to me. With the holiday season ramping up, now is actually a great time to be a little lazy with your money. I'm not saying you should neglect your finances, but think about areas where you can put your money on autopilot.
And Sarah and I are going to share two areas where we personally like to be a little lazy with our finances. So Sarah, what have you got for us?
Well, we're going to talk about low effort ways to hopefully, no guarantees, grow your money by saving and investing. With investing, the hands-on approach involves a lot of research and attempts at timing the market just so. Or you tell yourself that you do that, but you really just pick investments based on whatever's in the news at the moment.
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