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Money Matters
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Old 09-22-2011, 06:20 PM   #1
bimmerfan08
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Need Advice on RothIRA

Hey guys,
I just recently started investing and want to open an a retirement account while Im young (21yo) so I can start putting money aside. I have 401k and some shares in stock but Ive been talking recently to 2 good friends who told me to open up a RothIRA. I know a little about how the account works but what is the best institution or source to go through and open one up? how much can I expect to pay monthly? yearly? Im in my last year of college but I have a little bit of money off the to side that Id like to put into this. Should I do it now or wait until I have full time job with steady income? Thanks
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Old 09-22-2011, 06:24 PM   #2
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Hey guys,
I just recently started investing and want to open an a retirement account while Im young (21yo) so I can start putting money aside. I have 401k and some shares in stock but Ive been talking recently to 2 good friends who told me to open up a RothIRA. I know a little about how the account works but what is the best institution or source to go through and open one up? how much can I expect to pay monthly? yearly? Im in my last year of college but I have a little bit of money off the to side that Id like to put into this. Should I do it now or wait until I have full time job with steady income? Thanks

You can open up a Roth IRA at any online broker such as Scottrade. A Roth IRA will be identical no matter the institution. Most of them will have minimum requirements for opening an account (I think Scottrade is $500) and then after that it's a certain amount per trade.
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Old 09-22-2011, 08:36 PM   #3
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You can open up a Roth IRA at any online broker such as Scottrade. A Roth IRA will be identical no matter the institution. Most of them will have minimum requirements for opening an account (I think Scottrade is $500) and then after that it's a certain amount per trade.
what are some of the best ones in terms of fees and costs? vanguard? edward jones? Also what is the minimum monthly amount you can deposit?
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Old 09-22-2011, 08:54 PM   #4
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what are some of the best ones in terms of fees and costs? vanguard? edward jones? Also what is the minimum monthly amount you can deposit?
You'll have to check them out yourself, but there is no minimum monthly amount. The max per year for 2011 is $5K.
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Old 09-23-2011, 12:45 PM   #5
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You'll have to check them out yourself, but there is no minimum monthly amount. The max per year for 2011 is $5K.
okay thanks, much appreciated
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Old 09-23-2011, 12:56 PM   #6
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You'll definitely want to open a rothIRA at your age when the taxes are low. Fund your retirement in this order

1) max company 401k match, if any
2) max roth ira
3) max 401k.

Roth is very important because it's post-tax money. When you're starting out you're taxed very little if anything at all so it's the best vehicle to use. You can also withdraw the contribution at any time without penalty, use the money/earnings toward a new house in 5 years, etc. etc. Very flexible.

The brokerage you choose will depend on your trading style. Most ppl manage their retirement accounts passively (just buy index funds and leave it along for the long term). For that I recommend Vanguard. They have some of the most low-expense index funds and is regarded as the gold standard when it comes to a broad spectrum of index funds.
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Old 09-23-2011, 04:13 PM   #7
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You'll definitely want to open a rothIRA at your age when the taxes are low. Fund your retirement in this order

1) max company 401k match, if any
2) max roth ira
3) max 401k.

Roth is very important because it's post-tax money. When you're starting out you're taxed very little if anything at all so it's the best vehicle to use. You can also withdraw the contribution at any time without penalty, use the money/earnings toward a new house in 5 years, etc. etc. Very flexible.

The brokerage you choose will depend on your trading style. Most ppl manage their retirement accounts passively (just buy index funds and leave it along for the long term). For that I recommend Vanguard. They have some of the most low-expense index funds and is regarded as the gold standard when it comes to a broad spectrum of index funds.
Thanks for the help. My roommate also suggested Vanguard to me if I can afford it right now. I might have to wait until May when Im back at my job but I want to get the ball rolling.
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Old 10-17-2011, 06:34 AM   #8
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i looked into rothIRA's a little bit ago and i was kinda pissed to find that you can't get the money until you are 65. i'm planning on retiring at 50. i don't want to wait 15 years for my money when i'm too old to do anything with it.
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Old 10-17-2011, 09:28 AM   #9
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i looked into rothIRA's a little bit ago and i was kinda pissed to find that you can't get the money until you are 65. i'm planning on retiring at 50. i don't want to wait 15 years for my money when i'm too old to do anything with it.
Then you're pretty much stuck investing in methods that don't offer tax advantages
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Old 10-17-2011, 09:42 AM   #10
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Why not do half and half? Use tranditional IRA/401k for years 50-65, then withdraw from Roth 65+.
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Old 10-17-2011, 09:54 AM   #11
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10% early withdrawal penalty for IRA/401K prior to 59 1/2 with few exceptions.
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Old 10-17-2011, 10:02 AM   #12
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You'll definitely want to open a rothIRA at your age when the taxes are low. Fund your retirement in this order

1) max company 401k match, if any
2) max roth ira
3) max 401k.

Roth is very important because it's post-tax money. When you're starting out you're taxed very little if anything at all so it's the best vehicle to use. You can also withdraw the contribution at any time without penalty, use the money/earnings toward a new house in 5 years, etc. etc. Very flexible.

The brokerage you choose will depend on your trading style. Most ppl manage their retirement accounts passively (just buy index funds and leave it along for the long term). For that I recommend Vanguard. They have some of the most low-expense index funds and is regarded as the gold standard when it comes to a broad spectrum of index funds.
this isn't entirely true. if you withdraw before 5 years its an automatic 50% withholding.
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Old 10-17-2011, 10:37 AM   #13
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this isn't entirely true. if you withdraw before 5 years its an automatic 50% withholding.
That's not entirely true, either. You can withdraw principal at any time with zero penalty/taxes. However, the earnings on those contributions must remain for at least 5 years.

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Originally Posted by roastbeef View Post
i looked into rothIRA's a little bit ago and i was kinda pissed to find that you can't get the money until you are 65. i'm planning on retiring at 50. i don't want to wait 15 years for my money when i'm too old to do anything with it.
It's not 65 years old.....typically, you can start withdrawing funds at age 59-1/2. Like I said in the post above, you can take the principal that you invested at any time without any penalty.
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Last edited by evolved; 10-17-2011 at 10:38 AM.
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Old 10-17-2011, 12:42 PM   #14
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^^^^ +1
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