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BFG in the News: Victor answers a young reader’s question about investing in a Roth IRA

Investing Financial Planning Taxes Retirement Planning Baron Team Insights

Victor Cannillo, a Wealth Manager/Partner at Baron Financial Group, is quoted on this topic, answering a reader’s question on NJMoneyHelp.com by Karin Price Mueller, originally published in October 2024. Editor’s Note: Since the original 2024 publication date of the article, the Roth contribution limit has changed. Contribution limits may change yearly. This blog post reflects 2026 numbers.

I’m a college student with income. Should I invest in a Roth IRA?

A 30-second read by Victor Cannillo:  Before considering investing in an IRA, it would be prudent to have an emergency fund account. You may want to consider putting a portion of your income into an emergency fund, like a savings account, for example. That way, if any emergency expenses were to arise, you can take the money from there versus tapping into a retirement-type account. Consider what would be the optimal amount for you to put aside. A very general guideline would be 3-6 months’ worth of expenses.

Regarding your IRA question:

  • For young investors, the Roth IRA is a good option.
  • A Roth IRA is usually best for someone who is in a lower tax-bracket.  The idea is that you want to pay taxes in the lowest bracket possible. So, if you are making a lower income than you may in the future, you would want to pay taxes now, using a Roth.
  • The Roth contribution limit for 2026 is $7,500 if under 50 years old.
  • If you are age 50 or older, the limit is $8,600.
  • For more information, you can visit the IRS website

Consider reaching out to a financial planner to help you with your financial-planning journey. 

What is the best IRA for a young investor?

Read Karin Price Mueller’s article here. 

If you have any further questions, please reach out to the Baron Team.

Disclosure: This is a general communication being provided for informational purposes only. Past performance is no guarantee of future results. Every investment strategy has the potential for profit or loss. This material is not intended to be relied upon as a forecast, research, tax or investment advice. Please consult with a qualified tax, investment, or legal professional for personal advice.