NAME: OUTLINE Argumentative essay
Title: How to Create & Maintain a Roth IRA Account
I. Introduction
A. Hook (Surprising fact, anecdote, humor, definition, quote): [Roth IRA Definition] A Roth IRA is an individual
retirement account that allows a person to set aside a specific amount of after-tax income every year.
B. Background information:
1. Info piece 1: Unlike a 401k plan, a Roth IRA account requires no employer involvement to open. However, one
must have already earned income to open an account. Depending on one’s income, certain restrictions can
apply based on the filing status.
2. Info piece 2: A Roth IRA also allows a person to withdraw their contributed funds at any time, regardless of age,
without fees or taxes. This makes it easier to withdraw in case of emergency situations.
C. Thesis preview: By allowing the tax-free growth of one's financial savings and providing the flexibility of multiple
investment options, Roth IRA account creation and management is a crucial first step in the retirement planning
process.
D. Thesis: Therefore, this process should be started as young as legally possible in order to safeguard one’s financial
future.
Sample Thesis Formulas: Refer to the checklist located in D2L to answer 3 specific questions in order to formulate a cohesive,
specific and detailed thesis statement. Without a good thesis statement, your entire paper may suffer.
Topic Sentence of Body ¶ 1: To start the process, you must first find your Roth IRA eligibility, and open your account.
Finding your Roth IRA eligibility is extremely important, as Roth IRA qualifications are based on income limits, and you
may be illegible if you reach and/or surpass the income limits.
A. Example 1
1. Support 1: In 2022, a single person that has an income range of less than $129,000 could contribute the
maximum limit; $6,000 ($7,000 if the person is 50 or older). Married persons that file together and have an
income of less than $204,000 could contribute to the maximum limit; $6,000 ($7,000 if the person is 50 or
older). However, a single person that has an income greater than or equal to $144,000 cannot contribute to an
account. Married persons that file together and have an income greater than or equal to $214,000 cannot
contribute to an account either [Amount of Roth IRA Contributions That You Can Make for 2022] &
[Retirement Topics - IRA Contribution Limits]
a. Elaboration/Analysis: These limits provide some freedoms when it comes to income, as the ranges are quite
large to meet by oneself, and in marriage as well. This expands the possibility of people having the ability to
obtain a Roth IRA account.
b. Elaboration/Analysis: Conversely, if you reach and/or surpass the income limits, then you may not be eligible,
and can be subject to penalties.
B. Example 2
1. Support 2: When one cannot contribute to a Roth IRA account anymore as a result of their income reaching or
surpassing the income limit, they must find a way to surpass this hurdle. There multiple ways to solve this
setback, such as increasing 401K contributions and keeping the account open, or contributing to a traditional
IRA [I No Longer Qualify For a Roth IRA — Now What?].
a. Elaboration/Analysis: A 401(K) is a retirement plan that is sponsored by a company, and available to its
employees. By contributing to a 401(K) plan, it has the possibility of reducing your taxable income [What is a
401(K) Plan and How Does It Work?]. This means that you could find a way to contribute to a Roth IRA account
if the income is under the limit once more.
b. Elaboration/Analysis: A traditional IRA allows a person to contribute pre-tax income to their account, and
allow it to grow tax-deferred [Traditional IRA Definition, Rules and Options]. By contributing pre-tax income to
their account, it can allow them to lower their income enough to as not reach the limit.
C. Example 3
1. Support 3: Once you have figured out your eligibility status, you can then open your Roth IRA account with the
financial institution of your choice. Many financial institutions offer different investments and fees, so it is up
to the customer to select the institution that is best suited for their wants and needs. For example, two
institutions that deal with Roth IRA accounts are M1 Finance and Fidelity Investments. M1 Finance offers
fractional shares, as well as zero fees for account management and trading. However, it does not offer any
human financial advisors for retirement planning assistance. Fidelity Investments provides various educational
articles, as well as no Roth IRA account minimums and robo-advisor options [Best Roth IRA Accounts].
a. Elaboration/Analysis: M1 Finance offers many benefits; however, it is not suitable for beginners, and more
suited towards someone with financial planning experience.
b. Elaboration/Analysis: Fidelity Investments also provides many benefits; however, it is more suited towards
beginners and people with no financial planning experience.
D. Conclusion sentence/s transition to next paragraph: Finding your Roth IRA eligibility, as well as opening your
account, are very crucial steps in the Roth IRA account and management process. It creates the basis of the Roth
IRA account that you will use for your financial future.
II. Topic Sentence of Body ¶ 2: The second step of the process would be to fill out the proper paperwork, such
as the 3520-R form and beneficiaries, and select an investment. Filling out the proper paperwork is another
important step in this process, as this ensures your account’s legitimacy and efficiency, and selecting your
investment will choose how your savings are going to be saved.
A. Example 1
1. Support 1: Not filling out the 3520 form goes against US Code: Title 26 Code § 6677, or the Internal Revenue
Code § 6677. The penalties that incur as a result of this are especially burdensome; reaching up to $10,000 in
costs or a percentage from improperly obtained revenue. Some percentages include 35% of the gross value of
distributions or properties from an account, 5% of the gross value to a specific amount of assets that are
known to be owned by a taxpayer and/or citizen, and 25% of the gross value of any inheritance from another
person over $100,000. [What Are the Penalties for Not Filling Out IRS Form 3520?]
a. Elaboration/Analysis: While fixed numbers such as $10,000 can be hefty in themselves, mathematically,
depending on the gross value of the savings and the percentage, fixed percentages can be more costly.
b. Elaboration/Analysis: For example, if one has $100,000 and a fixed $10,000 must be taken away, they would
be left with $90,000. However, if one has $100,000 and a fixed 25% of the money must be taken away, they
would be left with $75,000 —that is a difference of $15,000.
B. Example 2
1. Support 2: A beneficiary is someone who is elected that inherits the Roth IRA savings. Selecting beneficiaries
will ensure that you get to select who gets the Roth IRS savings, just in case something happens to them. It
also ensures that the tax benefits will not be lost. [Options When You’re a Roth IRA Beneficiary]
a. Elaboration/Analysis: Tax-benefits can be very helpful to the beneficiaries. For example, qualified inherited
Roth IRA accounts allow the beneficiary to take the distribution tax free, after 5 years of the original owner’s
death, which allows for the beneficiary to obtain more money.
b. Elaboration/Analysis: Not selecting a beneficiary can lead to the possibility of being grouped up and divided,
depending on the laws of your area. This means that the money may not go to the person that one intends to,
which puts the intended beneficiary at a disadvantage.
C. Example 3
1. Support 3: Once you finish filling out the proper paperwork, the next step would be to select an investment.
Selecting the investment that fits your wants and needs is imperative, and yet, it is also one of the most
difficult parts of this process. For example, two investment choices include designing your own investment
portfolio and a target-date fund. An investment portfolio allows you to customize options based on your
timeframe, such as allowing you to choose from stocks, bonds, money market funds, and mutual funds. A
target-date fund is a combination of bonds and stocks that adjust over time. [5 Steps to Open a Roth IRA].
a. Elaboration/Analysis: The flexibility an investment portfolio provides to a customer allows them to customize
investment choices to suit their needs and situations. For example, in case of an emergency, the investment
portfolio would provide the most benefits to a customer.
b. Elaboration/Analysis: The flexibility a target-date fund provides to a customer provides stability and security
towards their financial savings. The adjustment of the stocks and bonds gives you the flexibility of selecting
safer investments in the future.
D. Conclusion sentence/s transition to next paragraph: Filling out the proper paperwork and selecting investments
are one of the most important parts of this process. It will create a path for your Roth IRA account to develop and
financially grow.
III. Topic Sentence of Body ¶ 3: The third and final step of the process would be to select and set up a
contribution schedule. Contribution schedules prevent the user from missing any payments towards their
investment accounts, which effectively prevents them from lagging behind.
A. Example 1
1. Support 1: One way to set up a contribution schedule is to work with the bank you are associating with to create
a contribution schedule for you. This way, you will be allowed to set up monthly or annual transfers (if you meet
income requirements) from your bank to your Roth IRA account [5 Steps to Open a Roth IRA]
a. Elaboration/Analysis: Setting up a contribution schedule between the bank you frequent allows you to make
easier transactions, which reduces the chances of you missing your planned contribution to your Roth IRA
account.
b. Elaboration/Analysis: When something is more convenient for the consumer, they tend to go towards that
option.
1. Example 2
2. Support 2: Another way to set up a contribution schedule is through automated investing. Automated
investing allows a user to fund their Roth IRA account by setting up transactions such as withdraws, direct
deposits, and payroll deductions [How to Start a Roth IRA]
a. Elaboration/Analysis: By setting up automated investing, the user will be able to consistently put away money
in their Roth IRA account for retirement.
b. Elaboration/Analysis: As a result of automated investing, there would be no need to manually invest, which
leaves the factor of human error and faulty memory out of the equation, making the user more likely to keep
putting investments in their Roth IRA account regularly.
2. Example 3
2. Support 3: Contribution schedules allow people to effectively organize important deadlines, such as April 15 th.
April 15th is the deadline to fund your Roth IRA account, using the income you earned in the past tax year
[When is the deadline for Roth IRA contribution?]
a. Elaboration/Analysis: A contribution schedule with a credible financial institution will ensure that important
deadlines such as April 15th are met.
b. Elaboration/Analysis: Automated investing contribution schedules will automatically fund the user’s Roth IRA
account, meaning that the funds will be automatically transferred before financial deadlines such as April 15 th.
E. Conclusion sentence/s transition to next paragraph: Setting up a contribution schedule is another crucial step to
this process. It ensures that the money you intend to save for your financial future gets transferred to your Roth
IRA account, allowing it to grow and develop.
IV. Conclusion
A. Rephrase thesis preview: Roth IRA account creation and management is a crucial first step in the retirement
planning process, allowing the tax-free growth of one's financial savings and providing investment flexibility.
B. Summarize main points (Point 1): To start the process, you must first find your Roth IRA eligibility, and open your
account. IRA qualifications are based on income limits, and you may be illegible if you reach and/or surpass the
income limits. Opening the account allows you to have a Roth IRA.
(Point 2): The second step of the process would be to fill out the proper paperwork and select an
investment. Filling out the proper paperwork ensures your account’s legitimacy and efficiency, and
selecting your investment will choose how your savings are going to be saved.
(Point 3): The third and final step of the process would be to select and set up a contribution schedule,
which prevents the user from missing any payments towards their investment accounts.
C. Rephrase/Restate Thesis Statement: The process of creating and managing a Roth IRA should be started as young
as legally possible in order to safeguard one’s financial future.
D. Concluding sentence/s: Creating and managing a Roth IRA can be rather lengthy and difficult at times, but it is
most certainly worthwhile in the long-run. Improving and protecting one’s financial future is imperative, and the
effects of it can last for a life-time.
