This is excellent advice when it comes to buying a new car. Instead of making expensive payments on a new car, you should be opening up a brokerage account on Charles Schwab or Fidelity and build up an asset, rather than creating a liability. When you make payments on a car, you become an asset to the lender, as it becomes a liability. Cars are not investments. If your income is under the threshold, you should be opening a Roth IRA and investing $6,000 to $8,000 per year into it. Once you reach 59-1/2, this amount can grow to a substantial amount for retirement. Keep these figures in mind to invest into a Roth IRA:
For a single filer in the United States, the income limits to contribute to a Roth IRA depend on your modified adjusted gross income (MAGI). Here are the details for 2025:
Income Limits for Roth IRA Contributions in 2025:
- Full Contribution:
- If your MAGI is $138,000 or less, you can contribute the maximum amount to a Roth IRA (up to $6,500 if you’re under 50 or $7,500 if you’re 50 or older).
- Partial Contribution:
- If your MAGI is between $138,000 and $153,000, you can contribute a reduced amount. The exact reduction depends on your income within this range.
- No Contribution:
- If your MAGI is $153,000 or more, you cannot contribute to a Roth IRA in 2025.
These limits can change annually based on inflation adjustments, so it’s always a good idea to double-check each year.