This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
You thought that extra money was play money
However, ROTH IRAs have salary caps, which means you cannot contribute to this magnificent and convenient investment fund if you earn a certain amount of money per year.
To contribute to a Roth IRA, single tax filers must have a modified adjusted gross income (MAGI) of less than $153,000 in 2023 (Nerd Wallet).
Congratulations You Earn Above Average Income
But if you earn more than the annual limit, you’re not sh*t out of luck.
Here’s what you can do instead:
Aim to max out your ROTH 401k.
Next, take the same amount you’d max out in your ROTH IRA and invest it in a standard investment account, so you’re still saving the equivalent as if you could invest in the ROTH IRA.
Don’t Miss Out On Investment Opportunities
What you want to avoid is missed investment opportunities.
When people have additional resources, their first instinct is not to invest them.
But for those that do, they always end up in a better financial position.
One Choice Can Heighten Your Financial Destiny
Saving several grand extra a year over decades adds up significantly.
It’s what separates millionaires from multi-millionaires.
Take this amount and divide it by 12 and invest it.
You will notice a big difference in your savings both now and, more importantly, several years when it starts to count and compounds significantly.
Automate As Much As Possible
Many ROTH IRAs are set up based on when you plan to retire, and you barely need to touch them.
If you’re seeking a more automated option, there are options such as mutual funds, ETFs, and robo-investing apps.
Key Takeaway: Take the max contribution you can’t invest in a ROTH IRA and invest it elsewhere. Don’t allow that money to go un-invested.
Spending Is Always An Option
The more you invest, the more options you’ll have with your money.
The more you spend, the fewer options you’ll have with your money.
The choice is yours. If you choose to invest more now, living in a way that aligns with your priorities is not a sacrifice.
What’s a sacrifice is spending all of your money now, which you will end up paying for later for the remainder of your years.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.