Can anyone please explain to me how Roth IRA contributions work?
I've gone out to Betterment and created an account and selected a Roth IRA. The Auto-deposit want's me to set up a $808.06 monthly deposit. Or an Annual deposit all at once of $9696.72. They claim this maximizes 2013 contributions and I wouldn't be asked for more until 2014. It appears they're going from 15 Apr 2013 to 14 Apr 2014 for their year.
Max contribution is $5,500 plus $1,000. I took that 10-day investment course, and I know Jesse said you can make more contributions but I still don't get it, even after reading it twice. Where does the additional $3,196.72 come from?
I've tried researching the contribution rules on the IRS and other financial sites and it's all very confusing. I want to be sure I'm not doing something illegal or unethical or whatever. I haven't given them any funds yet, I'm still waiting for the link to my checking account to be setup.
And yes I have the funds available. I started with $160K in my checking and I front-loaded my Investments category with $30K for future use. Well, the future is now.