Roth IRA? good?

[Special K]

Originally posted by: Xcobra
ahh I see. Well I am a bit tight with money right now and I want to keep some cushion in terms of emergency funds. So I think I will wait and save up some more and then open up my account. At least I have an idea where to start. I appreciate the responses guys! thanks!

Yeah, I wouldn't feel any urgent need to meet the April 15th deadline if I were you. You are very young and have many more years to invest.

 

[LuckyTaxi]

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

 

[LuckyTaxi]

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

 

[Capt Caveman]

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

 

[Capt Caveman]

OP - if you don't have the minimum needed to invest in a Vanguard fund, go with Fidelity or anyone else that allows you to perform a monthly direct deposit in place of a minimum deposit.

 

[LuckyTaxi]

Originally posted by: Capt Caveman

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

ah shucks, t rowe is looking good right about now.

 

[ebaycj]

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

 

[Special K]

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

Actually, I think you need to be like 59.5 before you can withdraw the earnings.

 

[imported_Lothar]

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

No.

 

[imported_Lothar]

Originally posted by: LuckyTaxi

Originally posted by: Capt Caveman

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

ah shucks, t rowe is looking good right about now.

Monthly direct deposit.
Vanguard has that option.

 

[Special K]

Originally posted by: LuckyTaxi

Originally posted by: Capt Caveman

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

ah shucks, t rowe is looking good right about now.

The Vanguard STAR fund requires a $1k initial investment, and then a minimum of $100 to add to your position:

link

Once you have accumulated $3k, you can then buy into a different fund, such as a Target Retirement fund.

 

[purbeast0]

I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

 

[Mr Pickles]

Special K for resident Retirement Fund Consultant

 

[imported_Lothar]

Originally posted by: purbeast0
I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

1.) Never a bad time to plan for your future.
2.) Yes, you can do that, or you can put in a monthly deposit.
3.) Few banks are good(I've only had personal experience with Bank of America which was great), but most are crap.
4.) Yes. Yes. There's no "expected" return on any type of investment.

 

[purbeast0]

Originally posted by: Lothar

Originally posted by: purbeast0
I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

1.) Never a bad time to plan for your future.
2.) Yes, you can do that, or you can put in a monthly deposit.
3.) Few banks are good(I've only had personal experience with Bank of America which was great), but most are crap.
4.) Yes. Yes. There's no "expected" return on any type of investment.

thanks for the replies.

when you say some banks are "good" ... what makes banks "bad"? is it soley in the fees associated with keeping an IRA open at the bank, or is there other stuff I'm missing? i plan on sitting down at my bank this saturday to atleast get some more knowledge of exactly what a roth IRA is, even if I don't start it there. but I want to go in as educated about other options as possible.

 

[imported_Lothar]

Originally posted by: purbeast0

Originally posted by: Lothar

Originally posted by: purbeast0
I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

1.) Never a bad time to plan for your future.
2.) Yes, you can do that, or you can put in a monthly deposit.
3.) Few banks are good(I've only had personal experience with Bank of America which was great), but most are crap.
4.) Yes. Yes. There's no "expected" return on any type of investment.

thanks for the replies.

when you say some banks are "good" ... what makes banks "bad"? is it soley in the fees associated with keeping an IRA open at the bank, or is there other stuff I'm missing? i plan on sitting down at my bank this saturday to atleast get some more knowledge of exactly what a roth IRA is, even if I don't start it there. but I want to go in as educated about other options as possible.

What is your bank?

 

[LuckyTaxi]

Originally posted by: Lothar

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

No.

No? I think he is correct. Contribution can be withdrawn at anytime regardless of 5 yrs rule

 

[LuckyTaxi]

Originally posted by: Lothar

Originally posted by: LuckyTaxi

Originally posted by: Capt Caveman

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

ah shucks, t rowe is looking good right about now.

Monthly direct deposit.
Vanguard has that option.

Vanguard does have that BUT they still require an initial deposit of $1k for STAR and $3k for any other funds.

 

[purbeast0]

Originally posted by: Lothar

Originally posted by: purbeast0

Originally posted by: Lothar

Originally posted by: purbeast0
I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

1.) Never a bad time to plan for your future.
2.) Yes, you can do that, or you can put in a monthly deposit.
3.) Few banks are good(I've only had personal experience with Bank of America which was great), but most are crap.
4.) Yes. Yes. There's no "expected" return on any type of investment.

thanks for the replies.

when you say some banks are "good" ... what makes banks "bad"? is it soley in the fees associated with keeping an IRA open at the bank, or is there other stuff I'm missing? i plan on sitting down at my bank this saturday to atleast get some more knowledge of exactly what a roth IRA is, even if I don't start it there. but I want to go in as educated about other options as possible.

What is your bank?

Chevy Chase

On the websites I couldn't find any information about fees when I was looking yesterday.

 

[LuckyTaxi]

Originally posted by: Special K

Originally posted by: LuckyTaxi

Originally posted by: Capt Caveman

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
so i should go for target retirement fund?

Check to see if it has a minimum investment amount. If you meet that amount, then go ahead. If not, then you will either need to wait until you have enough saved up to buy into it, or I think they have the Vanguard STAR fund that allows you to invest smaller amounts via direct deposit.

Check their website to verify.

Question - most of VG's fund require $3k to invest. If you wanted to invest in two funds, does that mean you need $6k total?

Yes

ah shucks, t rowe is looking good right about now.

The Vanguard STAR fund requires a $1k initial investment, and then a minimum of $100 to add to your position:

https://personal.vanguard.com/...Id=0056&FundIntExt=INT">link</a>

Once you have accumulated $3k, you can then buy into a different fund, such as a Target Retirement fund.

When you say buy into another fund, does that mean you reallocate your portfolio and move your funds/earnings from STAR to a different fund (i.e. Target Retirement Fund).

 

[imported_Lothar]

Originally posted by: LuckyTaxi

Originally posted by: Lothar

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

No.

No? I think he is correct. Contribution can be withdrawn at anytime regardless of 5 yrs rule

You can't withdraw earnings until 59 1/2, unless you're disabled or like giving money to government.

 

[imported_Lothar]

Originally posted by: purbeast0

Originally posted by: Lothar

Originally posted by: purbeast0

Originally posted by: Lothar

Originally posted by: purbeast0
I too am looking to start my roth before April 15th so I can max it out for last year.

Other than my 401k I don't have any type of investments/retirement planning. I wanted to go with Vanguard however I wanted to speak to someone on the phone about it simply because I don't know TOO much about it and this is my first time ever dumping like $9k (max out last year and this year at once) into some retirement plan type deal. I also had a few questions.

1. Since the market is kind of bad now economics wise, is it still a good idea to start one of these now? I plan on doing it pretty much regardless.

2. Can I just dump any amount of $$ I want into the roth through vanguard whenever I want? Can I put $2k in january and $3k in December, and nothing between? Or do I have to put in a monthly alotment?

3. Why does everyone recommend using Vanguard/Fidelity over a local bank? My current bank offers Roth IRA's and they have a nice online banking setup.

4. Will I choose funds where my money goes into like I did when I setup my 401k? Will they have different rates of returns and are there "expected" returns on them?

Sorry for the n00b questions.

1.) Never a bad time to plan for your future.
2.) Yes, you can do that, or you can put in a monthly deposit.
3.) Few banks are good(I've only had personal experience with Bank of America which was great), but most are crap.
4.) Yes. Yes. There's no "expected" return on any type of investment.

thanks for the replies.

when you say some banks are "good" ... what makes banks "bad"? is it soley in the fees associated with keeping an IRA open at the bank, or is there other stuff I'm missing? i plan on sitting down at my bank this saturday to atleast get some more knowledge of exactly what a roth IRA is, even if I don't start it there. but I want to go in as educated about other options as possible.

What is your bank?

Chevy Chase

On the websites I couldn't find any information about fees when I was looking yesterday.

Run away!!!

What a crappy website. They offer ZERO information about their IRA's and Brokerage services.

 

[purbeast0]

Originally posted by: Lothar

Run away!!!

What a crappy website. They offer ZERO information about their IRA's and Brokerage services.

no trust me their website is not crappy at all. the online banking is fantastic on it.

but yea information wise, i'm assuming they do that on purpose so you have to go in and sit down and talk to someone.

 

[LuckyTaxi]

Originally posted by: Lothar

Originally posted by: LuckyTaxi

Originally posted by: Lothar

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

No.

No? I think he is correct. Contribution can be withdrawn at anytime regardless of 5 yrs rule

You can't withdraw earnings until 59 1/2, unless you're disabled or like giving money to government.

Right, thats what he was saying. My concern was w/ the contribution I put in.

 

[rasczak]

Originally posted by: Lothar

Originally posted by: LuckyTaxi

Originally posted by: Lothar

Originally posted by: ebaycj

Originally posted by: LuckyTaxi

Originally posted by: Special K

Originally posted by: Xcobra
Oh I get it, well I do have 3000 saved up like I said BUT that is ALL I have, and want to keep some of it in case of emergency. Should I just go ahead and use? Can I withdraw money freely once the account has been set up?

In a Roth IRA you can withdraw your contributions at any time, but not any money earned beyond that.

I would personally save up until you have your emergency fund in place and can buy into the fund without touching the emergency fund, but that is just me. Some people use their Roth IRA as a source of emergency money.

I thought there was a 5 yr rule for this? You can't touch it until the 6th year?

I believe that is only on earnings. I believe the money you contribute can be withdrawn at any time.

i.e. i put in 10k. first year it earns 1k, total of 11k. I can withdraw 10k at any time, but that last 1k i cannot withdraw without penalty (or have to wait for 5 year rule + acceptable exception condition for no penalty).

No.

No? I think he is correct. Contribution can be withdrawn at anytime regardless of 5 yrs rule

You can't withdraw earnings until 59 1/2, unless you're disabled or like giving money to government.

I'm currently enrolled with Vanguard through my employer. I'm 33 y/o and just starting out with this retirement thing. (I'm a fool with money and finances and was too bullheaded to listen to my wife when she said we should start this about 10 years ago.) What can I reasonably expect out of my retirement? I'm currently putting in 6% with the company matching 1:2 upto 6% of my salary. I'm currently set at that rate. I know I'm not gonna have enough when i retire at age 72 so what other options do I have? A savings account at a bank is a joke.