Whaaat? Ross from Friends is like a Roth IRA? How is this possible? What’s a Roth? Slow down, we’ll explain everything.
First, let’s do a side by side visual comparison of both Ross and a Roth.
Sure, they don’t look much alike. One’s a fictional human character, the other’s a visual representation of a non-object. But really, that’s where their differences stop. Bear with us. It’s about to make a whole lot of cents (tee-hee).
Ross and Roths are both complicated
Ross: Everyone knows Ross is a difficult guy. He’s had an innumerable amount of crazy relationships. He and Rachel have serious issues, and he never seems completely comfortable in his own skin. Basically, he doesn’t know who he wants to be.
Roth: Roth IRAs have an identity crisis themselves. They’re commonly confused for a regular IRA, and it’s hard to nail down every type of investment that can be considered a Roth. They can be stocks or certificates of deposit, or they can even be a type of insurance.
Both need a lot of attention
Ross: He’s a “needy” guy. He’s sensitive, so you have to be careful how you treat him. He’s emotional, so you have to watch out for his reactions (like sleeping with a random woman when all Rachel said was that she wanted a break). And he’s insecure, so you have to spend a lot of time making him feel better about himself. #HighMaintenance
Roth: Since a Roth can be almost any investment, it’s a big deal picking which ones to make contributions to when you first set up the account. There are different plan options that include varied durations of investment and ranges of included investment types. And it’s important to keep an eye on how it’s performing, because with a lot of plans, you’re able to change things around.
But there’s only so much you can invest into them
Ross: How many episodes did you watch where you’re yelling at Ross on the screen? How many times did his friends yell at him? Let’s be honest, Ross can get annoying sometimes. Yes, he’s a lovable goof who in the end always comes through, but his smarty-pants manner can be a little grating.
Roth: Contributions to a Roth are limited each year, so you can only put so much money into the account. Plus, there’s a salary cap for who can contribute. If you make more than a certain amount each year as a single or married person, then you can’t contribute to a Roth.
Both believe in take-backs
Ross: He’s married. He’s divorced. He’s with Rachel, they’re broken up. Married again, divorced again. And again. Ross goes back on his promises many times. Yeah, ok, so it’s because he gets easily wrapped up in things, but takebacks are takebacks. And he’s full of ’em.
Roth: The beauty of Roth IRAs is that you can make withdrawals from them and not be taxed. You know how making early withdrawals from your 401k results in you paying the government a third of it? Well, that’s not the case for Roths if you are withdrawing from your contributions. Don’t touch the earnings though. Big Brother will take a cut if you do.
Both are totally worth it
Ross: He’s frustrating, complicated and stubborn. But he’s thoughtful, kind, smart, funny and when it really comes down to it, you can rely on him. Ross is not only your best friend, but your partner in crime. And in the end, he tries so hard. If that’s something you can understand, he’s your man.
Roth: They’re frustrating, complicated and stubborn. But they’re flexible, come with lots of options, and for the most part are very secure. They are one of the only investment options that don’t tax your earnings — what you make is yours to keep, 100 percent (as long as you don’t withdraw the earnings before you’re supposed to). A little understanding going into creating a Roth will result in greater returns.
[Editor’s note: because this is a financial article, we have to include a whole slew of disclosures to make Big Brother (and my boss) happy, so here goes:
– Shameless plug: Mazuma offers Roth IRAs
– Mazuma is insured by NCUA up to $250K
– This is a blog. I mean, it’s a blog that’s run by a financial institution, but it’s still a blog, and therefore falls into the category of “places you shouldn’t go for actual financial or legal advice.” You should talk to professional people with training and knowledge for advice about your particular situation.
Now that that’s out of the way, please feel free to return to your regularly-scheduled entertainment.]