Smart money podcast: Job scams and maxing out a Roth IRA

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode starts with a discussion about job scams, including how to spot them and how to avoid them.

Then we pivot to this week’s question from Stephen, who asks:

“I have a question about maxing out my Roth IRA. My wife just finished school and has started working, so now we have an influx of money and we will be able to max out our IRA this year. Does it make sense to invest a little bit each month until it is maxed out or invest it all at once?”

Check out this episode on any of these platforms:

• Apple Podcasts
• Spotify
• SoundCloud

Our take

If you’re job hunting right now, do your due diligence when vetting potential gigs. Scammers are posting bogus jobs online in the hopes of duping people out of their money, personal information or both. Some are even making fake websites that mimic those of real companies in order to look legitimate to potential victims. Before you give personal or financial information to a potential employer, verify the authenticity of the job and investigate the merits of a company’s website and job posting.

When you’re thinking of contributing to a Roth IRA, start by knowing which kind of IRA is the best home for your money — a Roth IRA versus a traditional IRA. The former allows you to contribute after-tax dollars into the account and then withdraw them tax-free in retirement. These may be a good idea for those early in their careers who anticipate being in a higher tax bracket in the future. Contributions to a traditional IRA are typically tax deductible in the year they were made.

If you’re thinking about maxing out your Roth by dropping a windfall into a retirement account, making the contribution all at once instead of staggered monthly can help you kick off compound interest more quickly. Also, contributions to Roths can work as a backup emergency fund, since you can withdraw them tax- and penalty-free.

Our tips

• Compare retirement vehicles. Having multiple accounts with different tax structures can help you diversify your retirement portfolio.
• Make the most of your time horizon. Dropping a windfall into a retirement account all at once can help you kick off compounding interest.
• Roths also can be a backup emergency fund. You can always withdraw your contributions tax- and penalty-free.

NerdWallet is not an investment advisor and does not provide advice, brokerage services, or recommendations to buy or sell particular stocks or securities. Our podcast is for informative and educational purposes only.

This article first appeared on NerdWallet.