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Quick IRA question

F

Fiveohhh

Diamond Member
I can enroll with my company in a few months and wondering ifits a good idea. They match, but only 25%, and up to 12% of my income(about 28k)(for every $100 of income max they'll match is 25% of $12). Theres a good chance I won't be there in a year too, not sure if that matters. Otherwise I was thinking of doing a roth IRA. I can't afford to do both. My financial situation isn't too bad I have a house and no cc debt, so if I don't invest it in an IRA it'll go into maybe getting a garage on the house or finishing fixing it up so I can sell this fall. Any thoughts or links to websites that have some pointers would be greatly appreciated.
 
If you are not going to be there in a year probably be better to do the roth, unless thry will vest it right away which I doubt.
 
Always get the maximum match if you can afford it, its free money! You'll need to save anyways, why not make it easier and have the company chip in?
 
Originally posted by: cjgallen
Lots of companies will take back the matching funds if you don't stay with them for 2 or 3 years.
Click to expand...


I'll have to talk with the HR lady about that on Monday.
 
Only 25% match, and there less than a year means you will probably not be "vested" enough to get more than 20% of that (= 5% match), possibly only 0% of the matching. Plus you'll probably get second-rate funds and have the extra work of rolling over the money when you leave.

Given all that, I'd recommend a Roth IRA at vanguard.com and investing in their VFINX S&P 500 fund. You might try to put in $1,000 - $3,000 for year 2004 if you can set it up before April, then put in ask much for 2005 as you can afford up to $4,000.

I think Vanguard will waive account maintenance fees if you set up for monthly withdrawals from checking, or you can just put in enough to start ($5,000 = $3K/'04, $2K/'05) to meet their no-fees minimum.
 
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