Get an IRA now or wait till after grad school?

[ampjess]

Hi all,

I am heading to grad school next September (2015) and am wondering if it's worth it to start either a Roth IRA or Simple IRA now. I work full time but my employer doesn't offer any benefits, which means no retirement, but I may be able to talk them into contributing a little towards a Simple IRA.
My concern is that I will quit next summer and them the IRA will sit around for a year while I finish my degree can't add anything to it. Do you have to make regular contributions to an IRA? And are there any other consequences I should keep in mind?

[50Sense]

Had I known, I would have opened a roth at 17.

I would go for the Roth IRA in your situation for a few reasons.

You would have the ability to compound growth over a longer period of time.
Your contributions MAY qualify you for the saver's credit on your taxes.
Flexibility. You can withdraw your contributions (the principal) tax free at anytime, since those funds have already been taxed. It's the GROWTH that's subject to tax prior to age 59.5. Even then, you may qualify for a penalty waiver for education expenses.

You don't HAVE to contribute while you're in school. You can't continue to contribute unless you or a spouse has earned income for the year, so just look for an account without custodial fees.

I would set aside some additional savings to prevent liquidating the roth in an emergency, but if I was in your situation, the benefits outweigh any cons.

[moneysma]

I agree with 50Sense....open the Roth. You can takes advantage of compound interest now and let time work it's magic. Trust me, every little bit helps.

I worked in college for Enterprise part time and could have invested in their 401k plan. I decided against it because I would only be there for a year or so. I wish I did though because that would have been a nice start to my savings.

A Roth is a great choice because in the event you might need the money, you can withdraw your contributions out without penalty. Of course, you would want to keep that money invested so it can grow for you, but it there is the option of withdrawing your contributions without a tax penalty.

[Petunia 100]

Hi all,

I am heading to grad school next September (2015) and am wondering if it's worth it to start either a Roth IRA or Simple IRA now. I work full time but my employer doesn't offer any benefits, which means no retirement, but I may be able to talk them into contributing a little towards a Simple IRA.
My concern is that I will quit next summer and them the IRA will sit around for a year while I finish my degree can't add anything to it. Do you have to make regular contributions to an IRA? And are there any other consequences I should keep in mind?

Does your employer offer a Simple IRA? Or are they willing to establish one? If your employer does offer a Simple, yes, participate and get your match.

Do you perhaps mean traditional IRA? A Simple IRA is an employer plan. Traditional and Roth IRAs are what you open all on your own.

Yes, it is absolutely worth it to get started now. Choose a quality custodian who will not eat you alive with fees. Vanguard, Fidelity, T. Rowe Price, or Schwab. My personal preference is Vanguard.