Another IRA question

**sweeps** · 04-26-2006, 11:06 AM

Re: Another IRA question

All at once is fine. Since you're opening your account for the first time, you may need to put it all in at once to meet minimum balance requirements. Depends on the company.

**Haku** · 04-26-2006, 11:50 AM

Re: Another IRA question

If you're way behind, then I'm totally hosed. Ha ha... ha... hmm.

Anyways, I'm glad you feel that way though. The earlier the better I say.

**parafly** · 04-26-2006, 11:53 AM

Re: Another IRA question

Starting a ROTH IRA at age 22 would probably put you ahead of the game. Also, if you have $4000 already saved up to open an account, you have alot more saved up than the average student. In any case, it seems like you have a great grasp on your financial future. Good luck.

**SuzeOFan** · 04-26-2006, 12:08 PM

Re: Another IRA question

First of all ..congratulations Tifnglen on being so wise with your money at so young an age!
You are way ahead of most people's future planning and thinking! (including me when I was your age!).

I know I'm repeating myself from another thread, so you others who already read this... bear with me.

The way I did it in the beginning, was to save the money in a specified ING savings account until I had the $3000. Now, I like to make deposits in the Roth in $500 increments, that way it's easier for me to keep track of. (You don't want to go over the max!) I have a designated account named "Retirement" at ING to do this with.

I (and my husband) max out the $4000 limit apiece every year. (until 2008 when it will go up to $5000). We like Vanguard, because they are one of the cheapest out there, but they require a minimum of $3000 to start, which may be difficult to to do for most people to come up with all at once. There are other places you can try that don't require so much to start a Roth.

__________________

**Ima saver** · 04-26-2006, 12:18 PM

Re: Another IRA question

The earlier you put it in, the better. I would do it all at once too, if you can. Once you get the acct. open, you can put it in monthly if you wish. I like Vanguard too, because of no load and low cost. That is where we have our reg. IRA and our Roths.

**SuzeOFan** · 04-26-2006, 12:19 PM

Re: Another IRA question

Uh sorry... one more thing at least *I* haven't heard anyone mention!

When you get to the point where you are ready to open a Roth, there's something else you will need to know....what fund you want your money invested in.

Vanguard gives you this huge laundry list of options.

From higher risk index funds to more conservative targeted retirement funds. (so conservative it's downright boring!) So you'll have to do a little research.

You may want to invest in an emerging markets fund... it's showing a lot of promise! Or a whole market or S&P index fund.

There's a whole slew of them to choose from.

The thing to remember is you can't jump around from one to another or you will end up paying fees. For Vanguard, they charge 1% on every dollar for trading funds held less than 1 year.

Maybe someone in this forum would like to pick up this subject in another thread?

Good luck!

**sweeps** · 04-26-2006, 12:37 PM

Re: Another IRA question

Originally posted by SuzeOFan

From higher risk index funds to more conservative targeted retirement funds. (so conservative it's downright boring!) So you'll have to do a little research.

You may want to invest in an emerging markets fund... it's showing a lot of promise!

Yikes.

**SuzeOFan** · 04-26-2006, 12:41 PM

Re: Another IRA question

Why 'yikes'?

**sweeps** · 04-26-2006, 12:56 PM

Re: Another IRA question

Compared to putting most of your money in emerging markets, I can see how target retirement funds would be considered conservative and boring.

Sure, emerging markets have been on fire for the last 3 years, but if you invest in them now you need to be able to stomach a 20-40% loss.

**Fern** · 04-26-2006, 12:58 PM

Re: Another IRA question

Just for my own amusement, i went to a savings calculator and found out the following:

If you faithfully invest just $4,000 into that IRA every year, starting this year at age 22 and continuing until age 52 (30 years), assuming a very modest 7% rate of return, by doing just this one single, small investment you will have amassed $434,741.

Put another way, starting now to invest $4,000 a year will get you nearly half the way to retirement (assuming $1 million for retirement). The other half could easily be accomplished by doing the same thing with a 401k investment.

That's the magic of starting young!

**SuzeOFan** · 04-26-2006, 01:27 PM

Re: Another IRA question

Speculation sweepsplayer.
Neither you nor I can predict the future of any stock...so?

In tifnglen's case, since they are so young, they would be best counseled to this rule of investment thumb:

younger invest more agressively,
older invest more conservatively

OR

Risk tolerance...(or lack thereof).
You have to know what you're willing to lose before you bail.

Sometimes I get the impression sweeps that you just like picking on me.

**sweeps** · 04-26-2006, 01:49 PM

Re: Another IRA question

Originally posted by SuzeOFan

Speculation sweepsplayer.
Neither you nor I can predict the future of any stock...so?

But actually I'm not speculating. I'm spreading my bets across practically the entire universe of stocks, as well as small investments in various other areas. I would argue that making a large bet on emerging markets (or gold or real estate or whatever the flavor of the day is) is speculating.

In tifnglen's case, since they are so young, they would be best counseled to this rule of investment thumb: younger invest more agressively, older invest more conservatively

Yes, a young investor has a lot of time to build huge wealth. I agree being aggressive is important, but there is a difference between investing aggressively and outright gambling. Personally I would consider a big bet on something like emerging markets a gamble. I think Suze Orman would agree with me on this one.

Sometimes I get the impression sweeps that you just like picking on me.

Nah, just stirring up some debate. No hard feelings.

**SuzeOFan** · 04-26-2006, 02:07 PM

Re: Another IRA question

Code:

But actually I'm not speculating. I'm spreading my bets across practically the entire universe of stocks, as well as small investments in various other areas. I would argue that making a large bet on emerging markets (or gold or real estate or whatever the flavor of the day is) is speculating.

Uh huh. Well I don't know where you have your Roth stashed Sweeps, but with Vanguard you don't get the option to "spread your bets across practically the entire universe of stocks."

(unless you chose a whole market index fund.

**sweeps** · 04-26-2006, 02:17 PM

Re: Another IRA question

Check out the Total Stock Market Index fund and the Total International Stock Index fund. That's about as good as it gets as far as diversification is concerned.

The target retirement funds include almost all of that, except for emerging markets. You can always add in a small investment of Emerging Markets Stock Index fund for that piece (which I do, by the way).

Another IRA question