Does it matter who I open up a Roth IRA with?

[isasir]

I am in the process of starting up a Roth IRA. I'm 24 (turning 25 in a few months) years old. I have a friend that works for MetLife, who I went over some of the fees with last night. I haven't looked at any other companies though, so I'm not too sure how they compare, although I'd assume all of them are similar, in order to be competitive.

Can anyone confirm if this is the case, or if perhaps I would find a much better deal with a credit union (?) or somewhere else. I'd like to help out my friend, but if there's a hot deal elsewhere, I'd consider going there.

 

[sandmanwake]

Yes it matters. Some places have maintance fees and such that will slowly suck away your savings, so avoid those places.

 

[isasir]

Originally posted by: sandmanwake
Yes it matters. Some places have maintance fees and such that will slowly suck away your savings, so avoid those places.

Do you know companies that don't? Melife has a $30 annual fee, and I think there's a death benefit 1.15% annual charge. that 1.15% would definitely add up, esp. if other companies don't have such a charge.

 

[sandmanwake]

I have mine with Scottrade. No fees except commission on trades. As a student still, I can't afford to put much into my account or do a lot of trading, so it while my money is just sitting, I'm not being raped on maintainence and inactivity fees. No automatic dividend reinvestments though.

 

[RossMAN]

I wonder what the differences between opening a Roth IRA with your local bank and Dreyfus, Janus, Vanguard, etc. are?

 

[sandmanwake]

I did look into opening my IRA up with the local bank I have my checking/savings account with and they did have maintainence and inactivity fees. Not to mention their commissions were higher than Scottrade. For the amount of trading I was looking to do and the amount I have in my IRA, they'd probably bleed me pretty good by the time I'm done with school. They probably have better research tools and a broker who could supposedly help me make better investing decisions, but at this point, I needed neither, especially if they were going to charge me all those fees for these extra features I'd never use.

 

[isasir]

b to da izzump

 

[isasir]

One last time.

 

[alm99]

Originally posted by: sandmanwake
I have mine with Scottrade. No fees except commission on trades. As a student still, I can't afford to put much into my account or do a lot of trading, so it while my money is just sitting, I'm not being raped on maintainence and inactivity fees. No automatic dividend reinvestments though.

How much did you open it up with?

Anyone know how much you need to open a Roth IRA up?

 

[woodie1]

You don't say how you plan on investing the funds you place in your IRA. That will effect your costs somewhat. I think you would be better off fee-wise by investing in a NO-Load Mutual Fund Company. One of the better ones is Vanguard. They have the lowest costs on practically all of their funds. IIRC the annual fee is $10/Fund if the total on deposit with them is less than $5,000.00. So if you open a Roth IRA and have a Money Market fund with them too the total of both funds determines if you pay any annual fee.

There are other low cost mutual funds companies too. They, IMO, are much better investment vehicles for IRAs. You can even trade stocks if you wish.

Lastly, I commend you for thinking of your future at such an early age. It is a wise thing you are doing.

EDIT: On your question about minimum to open an account. At Vanguard if you make automatic monthly payments I think $50.00 will open an account. Give them a call Monday they will be happy to answer your questions and send you information. 800-662-7447

 

[Blain]

I like self directed IRA's. Win or lose... you can't blame anyone else.

 

[isasir]

So I've been doing some more research and I realized that MetLife definitely wasn't a good fit for me, since as an insurance company, they mainly promote annuities. It's too similar to my 403b, (but more expensive) and I really should max out my contribution to my 403b, before I even look into doing an annuity for my Roth IRA. I got a decent amt. of information from Vanguard, and I do plan on looking into them further, esp. since I guess I can trade stocks with 'em as well. Thanks for the help.

 

[PlatinumGold]

I just opened up a SEP IRA account with my bank.

Remember it is one thing to open the account, it's another to buy the mutual funds or equities IN the account.

SEP or Roth is the tax designation but in itself does not accrue any growth.

It's WHERE you put the money that determines what kind of growth you're going to get. My bank gives me the flexibility to put the money in my SEP IRA account where i want to put it.

I'm currently looking at different Mutual funds right now. Most of the charges are from the Mutual Fund.

 

I use The Vanguard Group. Excellent service and they don't rape you with fees.

 

[TJN23]

on a side note, i have one with Ameritrade (formerly Datek) - anyone hear good things about them?

 

[Ameesh]

i have mine with schwab but i will be moving it to fidelity

 

[isasir]

Originally posted by: Ameesh
i have mine with schwab but i will be moving it to fidelity

What fees will you have to pay to move it? Why are you moving it anyways?

 

[sygyzy]

Originally posted by: woodie1
You don't say how you plan on investing the funds you place in your IRA. That will effect your costs somewhat. I think you would be better off fee-wise by investing in a NO-Load Mutual Fund Company. One of the better ones is Vanguard. They have the lowest costs on practically all of their funds. IIRC the annual fee is $10/Fund if the total on deposit with them is less than $5,000.00. So if you open a Roth IRA and have a Money Market fund with them too the total of both funds determines if you pay any annual fee.

There are other low cost mutual funds companies too. They, IMO, are much better investment vehicles for IRAs. You can even trade stocks if you wish.

Lastly, I commend you for thinking of your future at such an early age. It is a wise thing you are doing.

EDIT: On your question about minimum to open an account. At Vanguard if you make automatic monthly payments I think $50.00 will open an account. Give them a call Monday they will be happy to answer your questions and send you information. 800-662-7447

In the signup process at Vanguard you need to choose at least 1 fund and each fund is $1000. So I think that is the minimum. I didn't see any way around this.

 

[DaveSimmons]

Originally posted by: dwell
I use The Vanguard Group. Excellent service and they don't rape you with fees.

And they have the excellent VFINX S&P 500 index mutual fund, with lower annual expense fee than most other S&P 500 funds.

 

[isasir]

How many mutual fund families, and how many funds within each family are a good amount? I'm looking into opening accounts with Vanguard and perhaps American Funds, and maybe 5 or 6 diff't funds in each family. (Open one this year, another next year, and divide up the amount I contribute to each)

 

[Blain]

Fidelty offers tons-0-funds in their fund families. They have some good performers and usually lower loads. They also offer no-load funds as well.

Morningstar is a nice site to do some research.

 

[DaveSimmons]

Well, 10 funds would probably be excessive and you'd end up duplicating youself (buying the same stocks in different funds). If you have VFINX (large-cap index), maybe a total stock market index fund, and some actively-managed small cap, worldwide, and mid-to-large cap funds you've pretty much covered the market with just 5 funds.

Maybe a bond fund for the sixth, but bond funds are overpriced right now after so many people moved from stock to bond funds. I'd wait until the bond bubble bursts and people start panic-selling their bond funds.

You might check fool.com though to see what they say.