I’m a Financial Advisor: People Always Regret Doing These 5 Things With Their IRA

Core Insights - Individual retirement accounts (IRAs) are popular for retirement savings, but many individuals make mistakes that lead to regrets regarding their IRA management [1][2]. Group 1: Common Mistakes with IRAs - Not investing the money contributed to the IRA is a significant regret. Simply funding the IRA without investing in stocks, index funds, ETFs, or mutual funds prevents the money from growing [3]. - Withdrawing from the IRA before the age of 59 and a half incurs a 10% penalty and taxes, which diminishes retirement savings and results in lost compound growth [4][5]. - Ignoring income limits for contributions to Roth or traditional IRAs can lead to ineligibility or reduced contribution amounts. It is crucial to have earned income and stay within the income limits [6]. - Mishandling a backdoor Roth IRA can complicate tax filings and lead to unexpected taxes. Proper steps and professional guidance are recommended to avoid errors [7][8].