Roth Ira

[necine]

I have a matching 401K from my job. I get .5 matching up to 8%. I have it set to 8%. I want to start a roth ira that I can contribute a little each month to... Any ideas? low fees and such.

I also want to start investing maybe... Probably the same way a little bit each month. I don't have a large amount of cash on hand due to paying off my cc's however I have extra money each month to go with. Any ideas?

 

[Special K]

Vanguard has low fees, and IIRC they also allow you to open a retirment account with a low initial deposit if you agree to have a small amount directly withdrawn from your bank account each month. For a small amout to invest, I would consider the Vanguard Target Retirement funds. You pick a target retirement year, or as close to it as you can get, and the fund managers will periodically rebalance it over time. It's a good fund to start with, as it has a low minimum investment amount and offers good diversification.

Also, if you are intersted in learning more about investing, I would recommend this site:

diehards

There's lots of good info. and members on that board.

 

[Dacalo]

Fidelity or Vanguard. I use Fidelity myself; no large up front investment required, minimum $200 a month.

 

[DaveSimmons]

^ Vanguard is a good choice, their "Target (year)" mutual fund is a fund that's made up of other Vanguard US & foreign stock index and bond funds. It's a good choice for a first fund.

You have a couple of months left for the 2007 year IRA contribution, try to put as much in as you can before time's up for 2007.

 

[necine]

Originally posted by: DaveSimmons
^ Vanguard is a good choice, their "Target (year)" mutual fund is a fund that's made up of other Vanguard US & foreign stock index and bond funds. It's a good choice for a first fund.

You have a couple of months left for the 2007 year IRA contribution, try to put as much in as you can before time's up for 2007.

If I put it in now can it go towards my 2008 taxes... I already files for my return and it's going to clearing up the last of the cc debt.

 

[Lithium381]

i've got mine with fiedlity...... but i am planning on buying some of those vanguard target mutual funds, they're very highly rated

 

[Duddy]

lolwut?!

 

[DaveSimmons]

Originally posted by: necine

Originally posted by: DaveSimmons
^ Vanguard is a good choice, their "Target (year)" mutual fund is a fund that's made up of other Vanguard US & foreign stock index and bond funds. It's a good choice for a first fund.

You have a couple of months left for the 2007 year IRA contribution, try to put as much in as you can before time's up for 2007.

If I put it in now can it go towards my 2008 taxes... I already files for my return and it's going to clearing up the last of the cc debt.

A Roth IRA has no effect on your taxes and can be funded after you file. It is funded with after-tax money but all growth is tax-free.

You're thinking of a Traditional IRA, where you get a tax deduction now, but you pay taxes on withdrawals at retirement.

 

[DaveSimmons]

Originally posted by: Lithium381
i've got mine with fiedlity...... but i am planning on buying some of those vanguard target mutual funds, they're very highly rated

They're made up of the Vanguard funds I'd recommend on their own, like VFINX, VEURX, VEIEX. But this way you only have to come up with 1 minimum investment amount instead of 4-6.

 

[IGBT]

..is there still an income phase out of roth IRA?

 

[imported_Lothar]

Originally posted by: IGBT
..is there still an income phase out of roth IRA?

Yes.
If I recall correctly, that should be gone by 2010.

 

[dud]

The Roth IRA is one of the only "good" things that the Government has done for us. You can contribute $4K per year (this should increase over time) after tax dollars. Everyone should have a Roth.

If you want more info then pick up the latest copy of Money magazine. I have my Roth in the T. Rowe price 2030 retirement fund.

 

[Beattie]

Originally posted by: Special K
For a small amout to invest, I would consider the Vanguard Target Retirement funds. You pick a target retirement year, or as close to it as you can get, and the fund managers will periodically rebalance it over time. It's a good fund to start with, as it has a low minimum investment amount and offers good diversification.

Those funds are pretty bad. You are much better off just investing in decent growth stock/agressive growth type funds and let it ride.

 

[imported_Lothar]

Originally posted by: Beattie

Originally posted by: Special K
For a small amout to invest, I would consider the Vanguard Target Retirement funds. You pick a target retirement year, or as close to it as you can get, and the fund managers will periodically rebalance it over time. It's a good fund to start with, as it has a low minimum investment amount and offers good diversification.

Those funds are pretty bad. You are much better off just investing in decent growth stock/agressive growth type funds and let it ride.

Why are they bad?

 

[DisgruntledVirus]

Originally posted by: Beattie

Originally posted by: Special K
For a small amout to invest, I would consider the Vanguard Target Retirement funds. You pick a target retirement year, or as close to it as you can get, and the fund managers will periodically rebalance it over time. It's a good fund to start with, as it has a low minimum investment amount and offers good diversification.

Those funds are pretty bad. You are much better off just investing in decent growth stock/agressive growth type funds and let it ride.

I would like to know why you say Vanguard funds are bad. I have two aunts that both have done very well from Vanguard funds. One retired by late 40's and the other will be very well off financially at retirement due in part to Vanguard funds.

 

[Dubb]

OK, question.

Old job had a Simple IRA with 3% matching. new job is a young firm and doesn't plan to have retirement stuff set up until 2009. Should I start a roth IRA and wait till the new firm gets its simple IRA going to roll over the old simple IRA or what?

 

[Double Trouble]

Originally posted by: DisgruntledVirus
I would like to know why you say Vanguard funds are bad. I have two aunts that both have done very well from Vanguard funds. One retired by late 40's and the other will be very well off financially at retirement due in part to Vanguard funds.

Pretty much all the funds have fairly high fees associated with them. 12b-1 fees, redemption fees, management fees, administrative fees etc etc. It doesn't seem like much, but those smal fees drag down your return over the years. I work in the mutual fund industry so I know all about how just about everyone has their hand in the pot, with the end consumer funding it all.

Personally, unless you know what you're doing and you have a significant amount to invest, your best bet is just to buy some sector ETF's or index funds and let it ride. You can get plenty of index funds (such as S&P 500) without having to pay a load, so you can buy small amounts each month. It all adds up.

 

[Jawo]

Currently I have a Roth IRA with Fidelity's Target Date funds. Very low fees...

 

[ttown]

I read recently that Kiplinger rated T.Rowe Price's Target Year funds the best.

I don't invest in those, but I do have funds with T.Rowe Price and recommend them as a fund family.

hth

 

[Special K]

Originally posted by: DisgruntledVirus

Originally posted by: Beattie

Originally posted by: Special K
For a small amout to invest, I would consider the Vanguard Target Retirement funds. You pick a target retirement year, or as close to it as you can get, and the fund managers will periodically rebalance it over time. It's a good fund to start with, as it has a low minimum investment amount and offers good diversification.

Those funds are pretty bad. You are much better off just investing in decent growth stock/agressive growth type funds and let it ride.

I would like to know why you say Vanguard funds are bad. I have two aunts that both have done very well from Vanguard funds. One retired by late 40's and the other will be very well off financially at retirement due in part to Vanguard funds.

I would also like to know why you think Vanguard funds are bad.

Plus when you are just starting out, it makes sense to pick something like the Target Retirement funds because they offer instant diversification. All of Vanguards' other funds, such at the Total Stock Market Index and Total International Market Index, have a $3000-$5000 minimum investment amount. That means you would need a few thousand dollars up front to get a diversified portfolio.

Once your retirment savings have grown, I think it makes sense to do your own asset allocation, rather than relying solely upon a target fund (although there is certainly nothing wrong with leaving it in a target retirement fund).

 

[coaster831]

Originally posted by: tagej

Originally posted by: DisgruntledVirus
I would like to know why you say Vanguard funds are bad. I have two aunts that both have done very well from Vanguard funds. One retired by late 40's and the other will be very well off financially at retirement due in part to Vanguard funds.

Pretty much all the funds have fairly high fees associated with them. 12b-1 fees, redemption fees, management fees, administrative fees etc etc. It doesn't seem like much, but those smal fees drag down your return over the years. I work in the mutual fund industry so I know all about how just about everyone has their hand in the pot, with the end consumer funding it all.

Personally, unless you know what you're doing and you have a significant amount to invest, your best bet is just to buy some sector ETF's or index funds and let it ride. You can get plenty of index funds (such as S&P 500) without having to pay a load, so you can buy small amounts each month. It all adds up.

Vanguard Target retirement funds have zero fees outside of their VERY small expense ratio (0.20-0.25%)- they are about as efficient a fund as you can own for a beginning investor, since beginners might not have enough to meet the fund minimums to be properly diversified across multiple index funds. They are basically a fund made up of multiple Vanguard index funds, avoiding all the active management fees. These funds are excellent for people who want to keep it simple and hold for the long term- two things I believe are very important to investing.

About the only way to be more efficient is to purchase individual index funds yourself in the same percentages (you'd need the appropriate minimum investments, of course) and spread them between taxable and tax deferred accounts to take advantage of tax efficiencies between the different investment types (bond funds are typically less tax efficient than large cap stocks funds, etc). Of course, this assumes your 401k/IRA allows you to invest in anything you want without any other wrapper/plan fees, which isn't typical...

 

[necine]

VFIFX, so I should buy this directly from Vanguard with a monthly withdrawl? Sounds good... My only question is as I get older I may want to manage this stuff myself... can i take my money and put it somewhere else or do I have to leave it in there until I retire?

 

[DaveSimmons]

There's usually no go reason to shift existing money out of index funds like VFINX or the Vanguard target funds. At some point you'll probably also have a regular brokerage account in addition to the IRA, and you can try other investments there if you want.

I've never had a reason to move an IRA from one company or another, but if this is a serious concern you can send an email to vanguard to ask them what's involved if you can't find it by searching the website.

 

[Yossarian]

Originally posted by: tagej

Originally posted by: DisgruntledVirus
I would like to know why you say Vanguard funds are bad. I have two aunts that both have done very well from Vanguard funds. One retired by late 40's and the other will be very well off financially at retirement due in part to Vanguard funds.

Pretty much all the funds have fairly high fees associated with them. 12b-1 fees, redemption fees, management fees, administrative fees etc etc. It doesn't seem like much, but those smal fees drag down your return over the years. I work in the mutual fund industry so I know all about how just about everyone has their hand in the pot, with the end consumer funding it all.

Personally, unless you know what you're doing and you have a significant amount to invest, your best bet is just to buy some sector ETF's or index funds and let it ride. You can get plenty of index funds (such as S&P 500) without having to pay a load, so you can buy small amounts each month. It all adds up.

What you have written has nothing to do with the Vanguard funds in question.

 

[Passions]

Anyone have any advice on Bank of America Roth IRAs? I'm wondering if I should go with Vanguard or BofA.