IRAs: When is a good time?

**sweeps** · 02-12-2009, 05:06 AM

No way to predict what will happen in the short term, but it's important to start saving for retirement as soon as possible.

May I suggest setting up a monthly contribution to an IRA. That way you're not putting in all your money at once. T. Rowe Price has a monthly contribution option. Also consider ING/Sharebuilder.

**disneysteve** · 02-12-2009, 05:49 AM

The time to start was 4 years ago when you started having an income. Since we can't go back in time, the time to start is NOW! I would open your IRA as soon as possible and start contributing on a regular basis to max out the account by the end of the year.

**noppenbd** · 02-12-2009, 06:08 AM

Originally posted by pikey412 View Post

I am 27 and have been working on my own for 4 years now. Making around $52k depending on overtime. I'm a contractor so no 401ks or anything like that.

Anyway, I want to start contributing to a retirement account but am afraid to do so with the way the volatile market has been. When in the coming months/years would you all think it would be safe to start contributing to an IRA or something similar? What strategies would you offer to a newcomer during this time in the market? How much should I be contributing?

Also, it's important to note the distinction between "contributing to an IRA" and "investing in the stock market". "IRA" is just the tax designation for the account, which can hold anything from cash to CDs to bonds to stock, or even real estate. So even if you were adamantly opposed to any risk, you should still make your yearly IRA contributions.

I think this is something that confuses a LOT of people.

**disneysteve** · 02-12-2009, 06:39 AM

Originally posted by noppenbd View Post

Also, it's important to note the distinction between "contributing to an IRA" and "investing in the stock market". "IRA" is just the tax designation for the account, which can hold anything from cash to CDs to bonds to stock, or even real estate. So even if you were adamantly opposed to any risk, you should still make your yearly IRA contributions.

I think this is something that confuses a LOT of people.

Very true. Good point.

**simpletron** · 02-12-2009, 08:45 AM

just a reminder, you can still make contributions for 2008 tax year until april 15. all you have to do is tell them that the contributions are for 2008. this gets you the opportunity to max out both 2008 and 2009 this year.

**jIM_Ohio** · 02-12-2009, 10:22 AM

Couple of points- volatility is a risk, and to get a decent return you have to be able to take on the risk of volatility.

Stock market shows 10% annual returns with a deviation of 14. That means you are likely to see 24% returns and -4% returns in a given year (70% of the time??).

If you want less volatility, you would be looking at returns of around 5-6% with maybe a volatility of 10. (15% as likely as -5% 70% of the time).

I would not stop doing something because of volatility. I might add more investments to lower the volatility of whole picture (like invest 75% in equities and 25% in cash) so 25% of my overall portfolio is steady value and 75% is going on a 30 year roller coaster ride.

IRAs: When is a good time?