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Holy crap... (Roth IRA)

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Originally posted by: Skoorb
Originally posted by: Alchemist99
Originally posted by: blahblah99
Bah, I think the 401k/IRAs are a joke considering inflation rates will continue in the US years down the line...
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Did you know that if you invest $1000/year from the age of 20 to 30 and then STOP you will have more money than somebody who invests $1000/year from the ages of 30 to 65? I think that's how it goes. Anyway the beauty of compound interest means that the earlier you are the better off you'll be. Assuming that you contribute at a set amount, for every 7-10 years earlier you start you'll have twice as much when it comes time to retire.
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btw, just think about this. if you save $20 of your weekly paycheck, by the end of the end, you will have $1000
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Originally posted by: DaWhim
Originally posted by: fonzinator
Originally posted by: blahblah99
Bah, I think the 401k/IRAs are a joke considering inflation rates will continue in the US years down the line...
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True that. $1mil in 40 years will be approx the equivilent of $280K today! :Q Millionaire Calculator
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do you kow the power of interest? heh, you can earn compound interest on that too. to calculate when your money double, use 72/(interest rate), if you can have 12% interest rate, your money will double itself in 6 years! meanwhile, do not touch the money 😀
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Yes, I wasn't clear enough on my post. I'm ALL for IRAs and 401Ks. I was just illustrating what effect inflation has on our perception of $1mil.
 
the interest rate will adjust itself along with the inflation. unless you don't invest your money, that will be very stupid to do.
 
Originally posted by: fonzinator
Originally posted by: blahblah99
Bah, I think the 401k/IRAs are a joke considering inflation rates will continue in the US years down the line...
Click to expand...
True that. $1mil in 40 years will be approx the equivilent of $280K today! :Q Millionaire Calculator
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true, but that $1 million will actually be much more than a million so in reality it will still be a million.

Capice?

 
Originally posted by: Tabb
Okay, I am 17 and I want to start investing. What should I invest in and why?
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if you are planning for the long term, go for the Roth IRA(which is for retirement). you are too young to do anything right now. you may want to play with stocks, but I don't think you have too much money for it. if you just want your money to grow slow, deposit your money in a CD account. stocks and bonds will cost you fees
 
Originally posted by: OREOSpeedwagon
This is crazy, my coworker was telling me about this how i should start now (i'm 16) instead of waiting till i'm 40 like him. if i started putting $50 a month into this thing until i'm 59, when i retire i'll have $100k :Q whats crazy is when i'm out of college i'll be able to put around $200+ a month into this at least, i could be a millionaire when i retire :Q
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You better be a millionaire when you retire, you'll need it. A good retirement income of 50K/year or so(adjusted for inflation) would only last you 20 years, and you'll probably live longer than that. Heck, in 40+ years when you do retire, you'd need to be well in to the 7 digits to keep up with that 50K figure.
 
As far as being 25 and too old for a Roth IRA, you are crazy. START NOW. 25 is NOT too old to bank in. That would still leave you about 40 years give or take 10(!) to compound. If you are saving for a house now, just start a ROTH and put in minimal amounts. Save towards the house as much as possible. Then when you have the excess, pop it into the ROTH a little more. Depending on other liabilities besides the home loan(school, car, kids) just budget what you can afford.

I am 23 and have a ROTH and a 401 with 4% matching. I put 10% of my paycheck into the 401 with 4% matching on top, and then 125 bucks into the ROTH. Of course, the only liability I have is a school loan.

Just got to sit down and budget. Excel can be handy for that.
 
Originally posted by: alkemyst
Has nothing to do with a IRA or not....just putting money away early and not touching it can get you to millionaire status.
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Sure, but if you're not going to touch the money until retirement anyway, why give up the tax benefits?
 
I have also been looking for a way to start investing/saving some money. My company has a 401k and after I've been there another six months their matching program kicks in and I was planning on doing that. Is that enough or should I do something else as well? This ROTH business sounds very interesting...

Oh and I'm 22
 
Originally posted by: rpc64
I have also been looking for a way to start investing/saving some money. My company has a 401k and after I've been there another six months their matching program kicks in and I was planning on doing that. Is that enough or should I do something else as well? This ROTH business sounds very interesting...
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Not participating in a 401(k) to the full extent of your employer match is literally throwing away money.

I would certainly try to put away as much as possible in your 401(k) since it's a before-tax contribution (which reduces your total income, and therefore your annual taxes). Putting money into a Roth IRA instead of a 401(k) means you're contributing to your retirement fund in after-tax dollars. Sure, you don't pay any money on the withdrawals when you retire, but since your income (and therefore, tax bracket) will likely be lower when you retire, I suspect you come out ahead by maxing out your 401(k) and taking the (lower) tax hit than paying more tax on the money now and dodging the taxes later.

I think everyone should contribute to both their 401(k) and an IRA where possible.
 
i started my IRA when i was 16, i am now 24 and my ira is well into the 5 digits with out me putting a lot of money into it.
 
Originally posted by: Ameesh
Originally posted by: rpc64
Where do you go to find out about starting an IRA?
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i have my IRA with Charles Schwab, they give me good service so i keep my account there.
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What are the fees that they charge? I have mine at Edward Jones - $30/yr
 
Originally posted by: radioouman
Originally posted by: OREOSpeedwagon
This is crazy, my coworker was telling me about this how i should start now (i'm 16) instead of waiting till i'm 40 like him. if i started putting $50 a month into this thing until i'm 59, when i retire i'll have $100k :Q whats crazy is when i'm out of college i'll be able to put around $200+ a month into this at least, i could be a millionaire when i retire :Q
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And what would you do with $100k when you retire? Buy a Buick? $100k will be nothing by the time you retire. You might live on it for a year.
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If I put $200+ a month into it after I get out of college I'd say I'll have a lot more than $100k... Perhaps you should have read my entire post before replying.
 
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