Anyone have a Roth IRA?

[Erik88]

I'm very close to paying off my student loads(8 years early   :cheers: ) and  based on the little research I've done I think the best way for me to start investing would be to open a Roth IRA. I already contribute %5 into my 401k through work but it's not growing as quickly as I would like and I feel like it would be smarter to open an IRA instead of upping the contribution to my 401k.

 

My question is, can someone recommend a company to open it with? I asked the woman at Suntrust who helped me open my account when I moved to Florida about IRA's and she had never heard of a Roth IRA so they lost any chance of getting my money.

 

Thanks!

[runco]

I am no accountant or financial consultant, but I have studied Roth vs. traditional IRA.  The only difference I see, use pre-tax income to buy traditional IRA and use post tax income for Roth.  When you are ready to withdraw at 59 1/2 years old, with the traditional IRA you will pay income tax based upon your rate then.  With the Roth, you pay no income tax.  I am not 100%.  All of the investment capabilities are the same (I think).

 

If you are single and have a decent income, Roth is probably not the way to do.  If you have children, especially young children, you may be in lower tax bracket, and thus Roth may be a better option. 

[Patton]

How much are you talking about investing?

[Erik88]

It's just my GF and I. We will probably be married in the next 2 years but neither wants kids. I'd rather pay the income tax now as I suspect rates will only go up by the time I retire.

 

 

Patton, do you mean initial investment? I'm also trying to save for a down payment on a house so I'd rather not invest too much initially. Perhaps 2-4K.

[NRA]

do both, Fidelity has worked very well for me. Remember to diversify

[RobertNashville]

You probably cannot go wrong whether you chose a Roth, traditional or both.

A Roth is almost always the better way to go if you have a lot of time before retirement and often the better way even if you are starting late to save.  All the growth in a Roth is absolutely tax free which is hard to beat (unless your investments don't grow of course. ;) ). The theory with a traditional is that you get a tax break now then will, in theory, be in a lower bracket when it comes time to take the money out (paying income tax on the money as it's withdrawn). Other than that tax treatment they work exactly the same.

 

Congratulations on paying off your student loans (at all let alone early!)....put a steady 15-20% away in a combination of 401(K), IRAs etc and you should be pretty well set when you are ready to retire.

[gregintenn]

If your company matches your 401k contributions, I would go with the match first. Next, the Roth IRA would be a good option; especially for a young fella like yourself.

 

An IRA, or a Roth IRA is an IRS tax shelter. The investment vehicle in the IRA can be a mutual fund, bank CD, precious metals, stocks, bonds, etc. If you are looking for a low risk investment, go with the bank CD. If you are wanting bonds or mutual funds, talk to an investment company, or independent broker/mutual fund salesman. I imagine you could also do it online via etrade or other similar company, but unless you have a fairly good knowledge of investment vehicles, a good investment advisor can easily earn his money and help you all at once.

[Patton]

If we are only talking 4k and then not much else, you don't really have enough for much. If you can get 10k i would look into a money market Roth RIA.- You may be right, taxes will be more later.

[Patton]

Do you need money before you are 59.5 yo?

[jcoosi]

I have my roth through state farm

[Dmo34]

What he said.

Just bump up your 401k. 5% is not much, even if you have employer match-contribution. Try to get in the 15-20% range. If you want to invest in a roth, put like 1-2% in there and forget about it.  Also check into Fidelity, have had really good results.

I am no accountant or financial consultant, but I have studied Roth vs. traditional IRA.  The only difference I see, use pre-tax income to buy traditional IRA and use post tax income for Roth.  When you are ready to withdraw at 59 1/2 years old, with the traditional IRA you will pay income tax based upon your rate then.  With the Roth, you pay no income tax.  I am not 100%.  All of the investment capabilities are the same (I think).

 

If you are single and have a decent income, Roth is probably not the way to do.  If you have children, especially young children, you may be in lower tax bracket, and thus Roth may be a better option. 

[npgunner]

My strategy:
- invest in my 401k/403b up to the percentage my company matches [pre-tax]
- the rest goes into Roth IRA [after-tax]

I personally put in a total of 15%. My company matches 5% so my total investment is 20%.

As for where, I'd recommend a good broker. Someone that buys/sales from many investment companies. If you go with a Fidelity rep they are likely to push you towards Fidelity funds which may or may not be the top earners (or State Farm, Vanguard, etc.).

I found my guy through the Dave Ramsey ELP service (endorsed local provider). He was real good about sitting down, explaining all the investment types, showing me a broad range of funds from different companies, and talking about the fine print (no-load vs load funds for example). Also had good advice regarding my insurance portfolio and general financial topics. Here's a link for the Dave website, click on "ELP Investing" on the right side and fill in info to find a local contact if you choose. http://www.daveramsey.com

[xRUSTYx]

Vanguard -- Stick with their Index funds. 

[Guest ThePunisher]

Obama wants to redistribute your extra wealth to those that don't have any wealth at all. You've taken advantage of US retirement laws to the detriment of the underprivileged and have nots. Marxism and Capitalism is analogous to oil and water; they can't co-exist together. Obama wants all your wealth, and he will soon confiscate it all.

[Erik88]

Obama wants to redistribute your extra wealth to those that don't have any wealth at all. You've taken advantage of US retirement laws to the detriment of the underprivileged and have nots. Marxism and Capitalism is analogous to oil and water; they can't co-exist together. Obama wants all your wealth, and he will soon confiscate it all.

 

well.....alright then.

[npgunner]

Obama wants to redistribute your extra wealth to those that don't have any wealth at all. You've taken advantage of US retirement laws to the detriment of the underprivileged and have nots. Marxism and Capitalism is analogous to oil and water; they can't co-exist together. Obama wants all your wealth, and he will soon confiscate it all.

I too wonder when we may looking at Cyprus-style situation where the government just takes money from you.
Another awful thing that could happen is the forced nationalization of retirement monies. Either they take control, or simply state that retirement monies must be invested in treasury debt or something like that.

Either way, in my opinion I think that's a ways off. It's likely that taking people's retirement right now would severely p*$$ off those who are about to retire and would likely result in them being voted out. Now ... once all the boomers use up the their money and need it from the government, or die off then they will be able to take it.

[Spook]

Lots of good advice.... I would only add that the most important thing is to save and invest as much as you can, starting while you are young. Consider taxes but, most importantly, be consistent in your saving. The younger you are the more risk you can handle as over time you can make up any losses.

 

I don't always agree with Dave Ramsey but his system is proven. Stay out of debt as much as possible and save/invest as much as possible. Believe me, it WILL pay off in the future. As he says, "live like no one else (now) so you can live (later) like no one else."

[Patton]

Well Dave Ramsey has a lot more wealth than me but he says a lot of stuff i would not agree with.

[xRUSTYx]

Well Dave Ramsey has a lot more wealth than me but he says a lot of stuff i would not agree with.

 

You have to remember who Dave's "target audience" is ...

 

I don't agree with all of Dave's preachings, but for 95% of people - he will lead them out of debt and on to a path of financial stability. 

[monkeylizard]

I use Fidelity for mine. They have excellent tools on their website for managing the funds/stocks that you select. I can't say I've seen anyone with better web tools.

[Patton]

Dave's target audience wil buy anything and most of them already have. That's the reason they need Dave.

[enfield]

I would visit with a financial advisor rather than take advice from friends or radio ads.  It doesn't cost anything to talk to one.

[Guest Torrin]

My strategy:
- invest in my 401k/403b up to the percentage my company matches [pre-tax]
- the rest goes into Roth IRA [after-tax]

I personally put in a total of 15%. My company matches 5% so my total investment is 20%.

As for where, I'd recommend a good broker. Someone that buys/sales from many investment companies. If you go with a Fidelity rep they are likely to push you towards Fidelity funds which may or may not be the top earners (or State Farm, Vanguard, etc.).

I found my guy through the Dave Ramsey ELP service (endorsed local provider). He was real good about sitting down, explaining all the investment types, showing me a broad range of funds from different companies, and talking about the fine print (no-load vs load funds for example). Also had good advice regarding my insurance portfolio and general financial topics. Here's a link for the Dave website, click on "ELP Investing" on the right side and fill in info to find a local contact if you choose. http://www.daveramsey.com

 ^^^^^  This is exactly right in my opinion.

[Guest Torrin]

Well Dave Ramsey has a lot more wealth than me but he says a lot of stuff i would not agree with.

 

Hmmmm, spend less than you make,  don't borrow money and don't use credit cards.  Lots to disagree with there???

[gregintenn]

Hmmmm, spend less than you make,  don't borrow money and don't use credit cards.  Lots to disagree with there???

 

 

Pretty sound advice if you ask me.

 

Well Dave Ramsey has a lot more wealth than me but he says a lot of stuff i would not agree with.

 

I find that most people who disagree with his premise are in the same boat. May I ask what you disagree with him about?