Well, I am going to take the ROTH IRA plunge!

[ScrimpAndSave]

Ok, I listening to all of your advice. I currently have $20,000 saved up (I did that in a year, as many of you know). I am going to take $5,000 of it and invest it in my ROTH IRA which I only have about $400 in right now. I am not sure how to allocate all of my funds...should I just choose a 2035or 2045 fund? Is there something else I should do?

I am really nervous about it...I would hate to lose such a large chunk ' money that I feel like it took me forever to save up.

Thanks for your help!

[boosami]

Congrats on the savings. If you're not retiring until 2035-45, do not worry about the price of stocks. Put it in the fund targeted closest to your retirement year and don't worry about short term losses, because the gains will be massive long term.

[Hot dog]

I need to take the plunge too. Let us know how it goes. Who are you opening it with? I thought I would probably go the target fund route too. So it will be interesting to see what everyone says

[jIM_Ohio]

SnS- do NOT watch the balance every day. Find something more meaningful to do with your time.

I lost 80k in 2008. That is more than you have saved up. it was 40% of what I had saved. Look for something else to do with your time than to count your pennies.

Another tree, keep looking for the forest and let us know when you find it.

[disneysteve]

Don't forget that you have until April 15 to fund your Roth for 2008 and anytime from now until April 15, 2010 to fund your Roth for 2009. I would fund 2008 with this money. Then you can work on your 2009 contribution.

[simpletron]

remember to tell the institution that you invest with that most or all of the funds are for 2008, so you can still make more contributions for the rest of the year.

the target retirement funds are a good choice if you want a hands-off approach. other good choices for starting out would be a broad stock index fund like an S&P 500 or total stock market fund. also there are some good funds of fund(basket of other mutual funds) depending on you're with. whatever route you take, I would recommend that 80% or more be in stocks for someone just starting.

[ktmarvels]

We did this a couple years ago and went through vanguard with their 2045 target account. We did lump sum the first 2 years, and now this year I started doing monthly contributions and haven't had any problems.

I also agree you should put it towards 2008, cause you might want to put some money towards your 2009 contribution later.

[ScrimpAndSave]

Jim,

Hey...I have a few trees now...slowly making up a forest.

Steve,

I am going to dump $5,000 into the Roth IRA before April 15th 2008 so that it counts for 2008. Then I will work on 2009 like you said.

Everyone else,

I already have a fidelity account. I am going to stick with them. I basically just wanted to know if it was ok that I started out with a target fund date (probably 2035) for now...


Thanks all!

[disneysteve]

I am going to dump $5,000 into the Roth IRA before April 15th 2008 so that it counts for 2008. Then I will work on 2009 like you said.

Be sure that you specify that the money is to go toward your 2008 contribution. If you are doing it online, it should be clear. If you are doing it by mail, make sure whatever form you send in has it clearly marked.

[ScrimpAndSave]

Steve,

Thanks...I am definitely going to make sure that it says 2008. One question, my taxes are already finished for 2008 (I got wopping $61 back!)...will this affect my taxes at all? Do I have to file some sort of amendment?

Thanks all!

[disneysteve]

No. Since Roth contributions are not deductible, contributing to one doesn't have any effect on your taxes.

[kork13]

Steve,

Thanks...I am definitely going to make sure that it says 2008. One question, my taxes are already finished for 2008...will this affect my taxes at all? Do I have to file some sort of amendment?

Thanks all!

No, making Roth investments (with a couple rare exceptions) have no impact on your taxes. If it were a deductible IRA of some sort, then yes... But in this case, no worries. Just go for it.

(I got wopping $61 back!)

I feel you there... I actually just did my taxes today--I'm getting back (...drumroll...) $9! hahaha I seriously laughed at the person helping me with them when that final figure came up.

[disneysteve]

I got wopping $61 back

Congrats! That's great. I'll never understand the folks who get all excited over a big refund. They just don't comprehend that a refund is a bad thing. It means you've been overpaying the government all year.

I've offered many times that if folks want a big refund, they can send me a check every week and I promise to return all the money in April with no interest.

[jIM_Ohio]

Jim,

Hey...I have a few trees now...slowly making up a forest.

Steve,

I am going to dump $5,000 into the Roth IRA before April 15th 2008 so that it counts for 2008. Then I will work on 2009 like you said.

Everyone else,

I already have a fidelity account. I am going to stick with them. I basically just wanted to know if it was ok that I started out with a target fund date (probably 2035) for now...


Thanks all!

SnS- you don't need to build the forest- it's already there... you need to SEE the forest thru the trees.

[Goldy1]

Jim, you kno whow to keep it real.

My roth is a fidelity target retirement date. I really like fidelity. the customer service has been A+ to me.

I like the fact that if heaven forbid I HAD to access money, I can get the contribution back by withdrawing w/o penalty since it is my after tax money.