Anyone have a Roth IRA?

[gregintenn]

I would love to buy a house but I need to save more for a down payment before I can do so. We really don't want to stay in Orlando for longer than 3-4 more years so we may rent until it's time to relocate. 

You are on the right track, Erik. :up: Starting young is a great force in wealthbuilding.

[Erik88]

Both my wife and I have Roth IRAs managed by Edward Jones. What's nice about them is they are national, so I will still have a local office even if I move. I used to have an account and car loan through SunTrust when I was in FL, and it was a little bit of a pain when I moved to TN; I imagine it would be even more of a pain had I had an IRA through them.

 

The girl I'm working with works for Edward Jones. Glad to hear you're happy with them.

[TMF]

The girl I'm working with works for Edward Jones. Glad to hear you're happy with them.

Not a whole lotta forward progress in the past few years, but I suppose everyone is in the same boat in that regard. As far as customer service goes they have been top notch.

[gregintenn]

Not a whole lotta forward progress in the past few years, but I suppose everyone is in the same boat in that regard. As far as customer service goes they have been top notch.

Yeah....that wasn't unique to Edward Jones. This year has started off with a bang, however. The cool thing about dollar cost averaging is that no matter what the market does, you bought at least some of it at a decent price.

[Patton]

If you want out of Orlando, then I wouldn't buy a house there. Someone will come along and say you should though. I want out of my town but I own a house here. Get my point?

Serious question, Did the lady you speak to say that you had enough to do a Roth IRA? I heard to get one started I needed a minimum of 10k(everybody says $100 but try to get one to help you)
Honestly, just a savings account until you get 10k for a house may be just what you should do. The goal should be to get a house soon and to get it payed down soon. Pay it off completely if you wish. I would still do my 401k to what my employer matches. After my home was financed, sometime before paying it off I would start a Roth IRA, Money Market IRA, or what have you.

[Erik88]

If you want out of Orlando, then I wouldn't buy a house there. Someone will come along and say you should though. I want out of my town but I own a house here. Get my point?

Serious question, Did the lady you speak to say that you had enough to do a Roth IRA? I heard to get one started I needed a minimum of 10k(everybody says $100 but try to get one to help you)
Honestly, just a savings account until you get 10k for a house may be just what you should do. The goal should be to get a house soon and to get it payed down soon. Pay it off completely if you wish. I would still do my 401k to what my employer matches. After my home was financed, sometime before paying it off I would start a Roth IRA, Money Market IRA, or what have you.

 

She did not mention how much I would need to open the IRA. We haven't got that far into the conversation yet.

[xRUSTYx]

Erik ...

 

Stay away from financial advisors. 

 

Do yourself a favor:

 

Go here:  bogleheads.org

Order This:  http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365/ref=sr_1_1?ie=UTF8&qid=1364950721&sr=8-1&keywords=The+Bogleheads%27+Guide+to+Investing

 

Read the book -- research the boards -- ask your questions.  No fee's, no commission's, only the $15 for the purchase of the book, and the time spent on the forum.

[Patton]

How does this benefit you?


...and some people who weren't adequately insured. I'm not sure what you're smoking if you think people can't sue you and win a settlement against investments. Anything you own is subject to lawsuits.


Eric, I'd be very careful who you take investment advice from. I would suggest someone who has some money.

It's not what I'm smoking it is what the kid driving daddy's car killing his friend and a few others was smoking. I drive buy the family's house and accident scene almost every week. If their son was alive today his parents would hug him and then kill him again for that stupid crap he pulled. Edited April 3, 2013 by Patton

[xRUSTYx]

If you want out of Orlando, then I wouldn't buy a house there. Someone will come along and say you should though. I want out of my town but I own a house here. Get my point?

Serious question, Did the lady you speak to say that you had enough to do a Roth IRA? I heard to get one started I needed a minimum of 10k(everybody says $100 but try to get one to help you)
Honestly, just a savings account until you get 10k for a house may be just what you should do. The goal should be to get a house soon and to get it payed down soon. Pay it off completely if you wish. I would still do my 401k to what my employer matches. After my home was financed, sometime before paying it off I would start a Roth IRA, Money Market IRA, or what have you.

 

Huh?  Roth IRA has a maximum deposit of $5,000 for tax year 2012 (must be deposited prior to 4/15/2013) and $5,500 for tax year 2013.  I think Vanguard's minimum is $1,000 if my memory serves me correctly .... Let me check ** steps away for a minute ** yup ... Minimum is $1,000.

 

https://investor.vanguard.com/what-we-offer/iras/traditional-iras-and-roth-iras?Link=Body2&LinkLocation=SavingIRA

 

I have to backdoor my own Roth.  I deposit in to a traditional IRA, then backdoor transfer in to a Roth IRA. 

 

If we are talking retirement investment planning, I have another good book for ya'll to read :) 

 

http://www.amazon.com/The-Bogleheads-Guide-Retirement-Planning/dp/0470919019/ref=sr_1_2?ie=UTF8&qid=1364950721&sr=8-2&keywords=The+Bogleheads%27+Guide+to+Investing

[xRUSTYx]

She did not mention how much I would need to open the IRA. We haven't got that far into the conversation yet.

 

DON'T GO ANY FARTHER IN TO THE CONVERSATION.  Stay Away!  Spend the money on the (2) books I have listed above, and a couple of weeks time on the boards, and you'll get the answers you need.  Shoot -- Go ahead and post their now, and you will get tailored advice. 

 

Post Here:

http://www.bogleheads.org/forum/viewforum.php?f=1

[Erik88]

DON'T GO ANY FARTHER IN TO THE CONVERSATION.  Stay Away!  Spend the money on the (2) books I have listed above, and a couple of weeks time on the boards, and you'll get the answers you need.  Shoot -- Go ahead and post their now, and you will get tailored advice. 

 

Post Here:

http://www.bogleheads.org/forum/viewforum.php?f=1

 

Can you explain why I should avoid the financial advisor? Who did you open your IRA with?

[Patton]

Huh? Roth IRA has a maximum deposit of $5,000 for tax year 2012 (must be deposited prior to 4/15/2013) and $5,500 for tax year 2013. I think Vanguard's minimum is $1,000 if my memory serves me correctly .... Let me check ** steps away for a minute ** yup ... Minimum is $1,000.

I actually knew it was $1000 my fingers kept saying $100.
So can I get started with $1000? Are we only making about an extra 1-2% over our 401k after the amount our employees matches?

On the $5000/2012 and $5500/2013, that is only desposits on open accounts though right?

[xRUSTYx]

Can you explain why I should avoid the financial advisor? Who did you open your IRA with?

 

Sure :)

 

At the end of the day, they aren't responsible for your funds, YOU are.  In my opinion - outside of a limited few - I think financial advisors are a joke.  Investments aren't rocket science like the media or a financial advisor will try and portray.  The links I sent you to in my previous 2 posts will break everything down for you fundamentally.  Its so simple.  Read both books, ask your questions in the bogleheads forum about advice once you get a handle on what you'd like your asset allocation and risk management to be, and make a choice.

 

Bogleheads -- Is a relatively risk averse forum with very intelligent investors.  Most invest in Vanguard's Indexes & ETF's.  If you actually take a look at each Vanguard Ticker (indexes, ETF's, etc...) You'll better understand what I'm talking about. 

 

I use Vanguard myself.  Most friends that have IRA's use them as well.  Vanguard has been around for a very long time :)

 

Here's a quick breakdown that essentially the books I posted previously, go over.

 

It takes literally 10 minutes to set up your IRA with Vanguard

 

Here are the links again :)

1.  www.bogleheads.org

2.  http://www.bogleheads.org/wiki/Main_Page  <-- wiki page (start here)

3.  https://investor.vanguard.com/what-we-offer/iras/benefits-of-an-ira

 

Books (the best $25 you will ever spend)

http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365/ref=sr_1_1?ie=UTF8&qid=1364952297&sr=8-1&keywords=The+Bogleheads%27+Guide+to+Investing

 

http://www.amazon.com/The-Bogleheads-Guide-Retirement-Planning/dp/0470919019/ref=sr_1_2?ie=UTF8&qid=1364952297&sr=8-2&keywords=The+Bogleheads%27+Guide+to+Investing

 

Shoot -- earlier today on bogleheads - a retired athlete went there looking for help.  Go over this thread alone, and you will see that these guys truly do care about helping you out :)

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=113977

[gregintenn]

Can you explain why I should avoid the financial advisor? Who did you open your IRA with?

Eric, I know this question wasn't directed toward me, but I would like to give you my opinion. I have a financial advisor. I rarely take advice from her, but have learned quite a bit from her. She is more interested in selling product than in my best interests, and I'm frankly too lazy to go out and find another. I pretty well know what I want to do, but do like the added assurance of thinking that she'd call if she saw me headed into a financial trainwreck. If you are confident on what you'd like to invest in, you can save some fees by doing it online. I like the convenience of this lady filling out the paperwork for me and coming here to my home when I ask.

 

If you aren't confident in your investment skills, I would suggest you find a GOOD financial advisor. You'll likely need to talk to several before you find a good one. A few things to look out for are:

1)One who is mainly trying to make a sell.

2)One who isn't interested in discussing anything except for what they have to sell.

3)One who doesn't answer your questions well, and explain everything to your satisfaction.

4)One who is condescending and tries to make you feel unable to understand what you are buying.

5)one who tries to sell you Whole, Universal, or any other type cash value life insurance.

[xRUSTYx]

I actually knew it was $1000 my fingers kept saying $100.
So can I get started with $1000? Are we only making about an extra 1-2% over our 401k after the amount our employees matches?

On the $5000/2012 and $5500/2013, that is only desposits on open accounts though right?

 

No worries Patton :)  I knew it was $1,000, but it wouldn't surprise me of some bottom of the barrel brokerage allowed for $100 funded IRA's. 

 

You certainly can get started with $1,000.  If you start the process with Vanguard - You can see what Indexe's/ETF's allow for a $1,000 starting point.  Start the IRA process - and on the first screen or two, it will ask you to pick what you want to invest your IRA funds in.  You'll see a list :)

 

As for the $5000/2012 and $5500/2013 -- No, that is not just on open accounts.  My wife just opened hers up last week :)  Brand new + $5,000 deposit in to a traditional, that was backdoored in to a Roth IRA :)

[Erik88]

Great advice Rusty and Greg. Appreciate it.

[xRUSTYx]

Erik,

 

I have no formal training in retirement investing.  I dabble in stocks but that's about it. 

 

It literally took me 1-2 weeks of reading and studying those boards to get up to snuff.  Shoot, I had to explain backdoor Roth IRA's to my CPA this year :) LOL

 

It may seem like a lot of information at first, but its not.  If you go with a 3 fund approach (which is almost entirely hands off) - and have the time to reassess once a year - you're ahead of 95% of people out there :)

[Patton]

 
As for the $5000/2012 and $5500/2013 -- No, that is not just on open accounts.  My wife just opened hers up last week :)  Brand new + $5,000 deposit in to a traditional, that was backdoored in to a Roth IRA :)

But I can start with $10k or $100k right? Wouldn't that be nice. Lol


Let me ask this, at the best in 30years it will only be worth 1.25-1.5 times what a traditional savings account would be worth. So if I had a 10k and never added to it in 30 years it would only have a slight advantage over anticipated inflation. The reason everyone's has just set idle for the last 5years.

[2.ooohhh]

Whether or not you look for an advisor is your call. If you need the money your investing then don't invest it. Go into any single investment ready to write off the sum of the investment as a total loss. If  you understand the mechanics of the investment and you can't stomach the loss you don't need to invest that much, or in that particular product. 3 funds as suggested by xrustyx is a great starting off point  understanding your investements. I use Vanguard for my Roth and am happy with both the customer service and several of the funds available.

[2.ooohhh]

Let me ask this, at the best in 30years it will only be worth 1.25-1.5 times what a traditional savings account would be worth. So if I had a 10k and never added to it in 30 years it would only have a slight advantage over anticipated inflation. The reason everyone's has just set idle for the last 5years.

 

 

no, your incorrect again. 

 

10k invested with an average rate of 10% (not to hard to achieve long term with mutual funds) x30 yrs  would be 174,494.02

 

10k invested at a 1% rate (high for traditional savings account but available if you shop around) x 30 yrs would become 13,478.49

 

so properly investing you would end up with 47x the profit of the savings account over the same time period.

 

 

Compound interest calculator so you can see for yourself.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Edited April 3, 2013 by 2.ooohhh

[gregintenn]

Let me ask this, at the best in 30years it will only be worth 1.25-1.5 times what a traditional savings account would be worth

I guess it depends on what your invested in, but I'd hope a decent mutual fund, bond fund, or most other popular investments would perform much better than that.

[xRUSTYx]

But I can start with $10k or $100k right? Wouldn't that be nice. Lol


Let me ask this, at the best in 30years it will only be worth 1.25-1.5 times what a traditional savings account would be worth. So if I had a 10k and never added to it in 30 years it would only have a slight advantage over anticipated inflation. The reason everyone's has just set idle for the last 5years.

 

Don't I wish :)

 

As for a traditional savings account - who knows what 30 years might bring.  You're getting tax free growth via your Roth which is not something you get via a savings (money market, traditional, etc...)  Any sort of interest payments you make on it you'll actually have to pay Federal and state tax on.  Yes, Tennessee taxes that $$$ :)

 

2.oooohhh brings up a good point.  If this is money you see yourself needing in the next couple, three years, I wouldn't look to put that money in any sort of retirement investment account. 

Edited April 3, 2013 by xRUSTYx

[xRUSTYx]

no, your incorrect again. 

 

100k invested with an average rate of 10% (not to hard to achieve long term with mutual funds) x30 yrs  would be 1,744,940.20

 

100k invested at a 1% rate (high for traditional savings account but available if you shop around) x 30 yrs would become 134,784.89

 

so properly investing you would end up with 47x the profit of the savings account over the same time period.

 

 

Compound interest calculator so you can see for yourself.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

 

don't forget the tax advantages as well :)

[2.ooohhh]

don't forget the tax advantages as well :)

that's just a bonus. :)

[mav]

I think you are doing well asking these questions now while you are young.  I wish I had started into a 401-k earlier in life, but unfortunately I wasn't able until I was 28, which is when I was first offered participiation into a plan.  I have been contributing the maximum allowable amount ever since.