How do I contribute to a Roth IRA?

[isasir]

I got a friend that works for MetLife whom I wouldn't mind giving my business to, but, are there options that wouldn't involve me giving some company some money to set up my Roth IRA account? Obviously, just based on this question, I'm a Roth IRA newbie, so having him guide me through this would be beneficial. I figure tho' that perhaps I can just do the IRA myself and buy my friend some beers if possible. Same difference.

 

[Splork]

Unless you're just wanting to help out your friend, I think you can just start up a Roth IRA at any bank that offers them.

-sp

 

[isasir]

I guess banks don't charge anything to set up a Roth IRA?

 

[Aceshigh]

Go with Scottrade. They charge no fees to start your IRA and no fees to maintain it. Also their equity commisions are only $7 a trade so you don't eat into your principle with trading fees. That's a very important consideration if you want to trade inside your IRA because you can't exceed $3000 in contributions per year and you can't add more to your IRA to cover trading fees.

 

[DaveSimmons]

If you want to buy mutual funds instead of stocks or a band CD, you might look at www.vanguard.com to set up an account directly with them. The Vanguard VFINX s&p500 fund has the lowest annual expense for an s&p500 that I know of.

For a bank CD, www.etradebank.com or www.ingdirect.com probably offer a better rate than your local bank now, and will definitely offer a better rate in later years (at renewal time) when interest rates finally head up again.

 

[fjorner]

Rishi, if you're young and not rich, go with a traditional IRA, not the Roth. It's a matter of when the taxes are deferred. Your buddy, if he's worth his salt, will be able to explain that to you easily.

Buy aggressive C-share mutual funds. Perfect time to get in right now.

It's what i started doing four years ago.

 

[sandmanwake]

But we might have higher taxes when we retire. Assuming we do, would a traditional really be better than a Roth? How much higher would the taxes have to be for the Roth to be more worth it if we were to retire in say 50 years?

 

[Aceshigh]

Originally posted by: fjorner
Rishi, if you're young and not rich, go with a traditional IRA, not the Roth. It's a matter of when the taxes are deferred. Your buddy, if he's worth his salt, will be able to explain that to you easily.

Buy aggressive C-share mutual funds. Perfect time to get in right now.

It's what i started doing four years ago.

Actually, the younger you are, the more a Roth IRA makes sense. Because if you're young and have a long time to let it grow you will have more profits which are wholly TAX FREE when you withdraw.

 

[jeremy806]

www.vanguard.com

 

[isasir]

For the record, I'm 24 yrs. old (25 in November).

 

[Aceshigh]

I would go with a Roth then. The longer time frame you have, the better the tax-free aspect of the Roth is over the tax-deductable aspect of the traditional IRA.

 

[RossMAN]

All the Roth's I researched offered two methods of contribution:

1) Mail them a check, usually a lump sum before April 15 to count towards the previous tax year.
2) Monthly auto payment deducted straight from your checking account for whatever you want. So if your max contribution is $3000 / 12 months = $250 per month you could go lower if you want.