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At what age...

I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
 
Originally posted by: GTaudiophile
I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
Click to expand...
Why would you invest in Roth IRAs at 16? The idea with Roths is that you invest when you're in a high tax bracket and withdraw when you're in a lower one since the money's taxed on withdrawal but not investment.
 
Originally posted by: hjo3
Originally posted by: GTaudiophile
I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
Click to expand...
Why would you invest in Roth IRAs at 16? The idea with Roths is that you invest when you're in a high tax bracket and withdraw when you're in a lower one since the money's taxed on withdrawl but not investment.
Click to expand...

Ummm. My idea: Invest circa. 4K at 16, pay the tax then, instead of on the capital gains at say 65-years-old, which by then, should be a lot!
 
Originally posted by: GTaudiophile
Originally posted by: hjo3
Originally posted by: GTaudiophile
I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
Click to expand...
Why would you invest in Roth IRAs at 16? The idea with Roths is that you invest when you're in a high tax bracket and withdraw when you're in a lower one since the money's taxed on withdrawl but not investment.
Click to expand...

Ummm. My idea: Invest circa. 4K at 16, pay the tax then, instead of on the capital gains at say 65-years-old, which by then, should be a lot!
Click to expand...
I thought it was treated as ordinary income when you began withdrawing?
 
Originally posted by: hjo3
Originally posted by: GTaudiophile
I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
Click to expand...
Why would you invest in Roth IRAs at 16? The idea with Roths is that you invest when you're in a high tax bracket and withdraw when you're in a lower one since the money's taxed on withdrawal but not investment.
Click to expand...

That's a Traditional Roth, and unfortunately there are income limits that prevent those in higher income tax brackets from taking the deduction on their contributions.
 
Originally posted by: hjo3
Originally posted by: GTaudiophile
Originally posted by: hjo3
Originally posted by: GTaudiophile
I started investing in Roth IRAs at 16 (after I got my first job as a flower delivery driver). My father started a few accounts in my name even earlier. Never too young to start!
Click to expand...
Why would you invest in Roth IRAs at 16? The idea with Roths is that you invest when you're in a high tax bracket and withdraw when you're in a lower one since the money's taxed on withdrawl but not investment.
Click to expand...

Ummm. My idea: Invest circa. 4K at 16, pay the tax then, instead of on the capital gains at say 65-years-old, which by then, should be a lot!
Click to expand...
I thought it was treated as ordinary income when you began withdrawing?
Click to expand...

In a Traditional Roth that's true, but not in a Roth IRA.

Traditional Roth -> Tax-Deductible
Roth IRA -> Tax-Deferred

Pay now or pay later. For most people the Roth IRA is by far the preferred choice due to the capital gains that GT pointed out.
 
I have thought about investing since 20, didn't start until 23 when I started my full time job. I invest up to the matching contributions (5%). After that I plan on investing in a Roth IRA while I'm in a low tax bracket, but am currently building up for the larger down-payments required for a construction loan by investing in a traditional mutual fund.

Originaly posted by: Descartes
In a Traditional Roth that's true, but not in a Roth IRA.

Traditional Roth -> Tax-Deductible
Roth IRA -> Tax-Deferred

Pay now or pay later. For most people the Roth IRA is by far the preferred choice due to the capital gains that GT pointed out.
Click to expand...

You mean a Traditional IRA correct?

Pretty much the best way to think of it is:

If you are paying less in taxes now than you believe you will be when you retire, then invest in a Roth IRA

If you think you'll pay less taxes later, invest in a traditional IRA

And when you get to the point of withdrawing the money think of the following. If you want to buy a $20K boat you either take $20K out of your Roth or $30K out of your traditional IRA (assuming 33% taxes).
 
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