How to Choose an IRA

**disneysteve** · 03-18-2010, 05:09 PM

You need to decide what type of investments you want to make within the IRA. If you want to buy individual shares of stock, look for a discount broker like ShareBuilder or Scottrade. If you want index mutual funds, Vanguard is a great choice. If you want a target date retirement fund, T. Rowe Price, Fidelity and Vanguard are the leaders. If you want something else, there may be other places that are best.

You also aren't limited to having just one account. You are only limited in the total annual amount you can contribute. Currently, the maximum Roth contribution is $5,000 if you are under 50. That could all go into one account or could be split among two or more accounts. So, for example, you could put $3,000 in a Vanguard Total Stock Market index fund and $2,000 in a Sharebuilder account to buy some individual stock.

**nck4857** · 03-18-2010, 08:04 PM

Originally posted by disneysteve View Post

You need to decide what type of investments you want to make within the IRA. If you want to buy individual shares of stock, look for a discount broker like ShareBuilder or Scottrade. If you want index mutual funds, Vanguard is a great choice. If you want a target date retirement fund, T. Rowe Price, Fidelity and Vanguard are the leaders. If you want something else, there may be other places that are best.

You also aren't limited to having just one account. You are only limited in the total annual amount you can contribute. Currently, the maximum Roth contribution is $5,000 if you are under 50. That could all go into one account or could be split among two or more accounts. So, for example, you could put $3,000 in a Vanguard Total Stock Market index fund and $2,000 in a Sharebuilder account to buy some individual stock.

Very good advice. I have two Roth accounts, with Trowe Price and Vanguard. Initially, I had started a Scottrade Roth, also, but they don't offer Dividend Reinvestment so if I decide to purchase stocks or ETF's in my Roth, I'm going to use Sharebuilder for 1)lower commissions and 2) the automatic (free) dividend reinvestment...

**snshijuptr** · 03-19-2010, 08:01 AM

Oh I like the idea of free reinvestment. Next couple questions:

Am I going to pay a lot more with monthly contributions rather than say a yearly contribution?

So the Roth IRA works just like any other investment account, except I can't withdraw from it except for specific reasons?

I've heard about putting the money in only one person's name so that you can have two accounts maxed to $5000. Can we open joint accounts, my husband and I, and have a total of $10000?

I'm still debating what I want these funds to be invested in.

**nck4857** · 03-19-2010, 08:43 AM

You can withdrawal what you put in anytime, because it is already after tax money.. You will be penalized,however, if you withdrawal earnings off of you what you put in, unless you're 59 1/2 or older and/or meet some other requirements...

You can only open an IRA under one person's name, hence the name "Individual" Retirement Account. As long as you meet the requirements, both you and your husband can have separate Roth's and both contribute the max ($5,000 or $6,000 each), depending on your age.

As far as funds go, I keep a pretty close eye on the stock market and everything, but I go for simplicity and have my Roth accounts split between TRRKX and VTIVX (T-Rowe Price and Vanguard). I put $500/month split between these two, until I hit the max for the year.

You can always transfer the money between your Roth's, once you get the money in there. It's a fairly simple process, so don't think you're locked with one Company or mutual fund once you commit.

**jIM_Ohio** · 03-20-2010, 07:15 PM

Sharebuilder will be $4 per purchase and $15 or so when you sell

for this to be "BETTER" than a mutual fund, you would need to invest $400-$4000 per transaction. $400=1% expense ration and $4000 is a .1% expense ration.

If you use sharebuilder relative to using a mutual fund, do not do it for low expenses.

How to Choose an IRA