| Posted by | Message |
Layabout 
UNO Fan
Baton Rouge
Member since Jul 2011
4449 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/2/12 at 2:38 pm to crosswood)
quote:
why or why not an individual should invest in one, and how one can acquire it.
You can open an account at almost any financial institution or brokerage. You get no deduction on your current taxes for the contributions that you make. The payoff comes when you start withdrawing your money because you pay no tax on the money you withdraw even though it presumably has appreciated over the years to be worth far more than your original contributions.
With a standard IRA the contributions are tax free but the withdrawals are not. With a Roth IRA the earnings are tax free provided you have reached 59-1/2 and you have held the account for five or more years.
Incidentally, distributions from a Roth IRA to your heirs are also not taxed. Additionally, there is no required minimum distribution when your reach 70-1/2.
This post was edited on 9/2 at 2:43 pm
|
| Back to top | |
saderade 
New Orleans Saints Fan
America's City
Member since Jul 2005
19684 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/2/12 at 5:06 pm to Layabout)
Any advice on what funds to pick with the Vanguard Roth IRA? Should I just go with one of the target retirement funds or pick them individually. I would like to be more aggressive than conservative at this point.
|
| Back to top | |
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
4449 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/2/12 at 5:24 pm to saderade)
quote:
I would like to be more aggressive than conservative at this poin
Vanguard is a good choice. If you pick a fund with a target date well into the future, the investments will be a lot more more aggressive than one with a target of, say, five years.
You can tweak it by adjusting the target year, i.e., if you actually plan to retire in 20 years, get into the plan with a target date of 25 or 30 years. These will be investing more aggressively given the longer time horizon.
This post was edited on 9/2 at 7:51 pm
|
| Back to top | |
gatorsimz 
Florida Fan
cafe risque
Member since Feb 2009
5236 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/2/12 at 10:07 pm to CQQ)
Not sure if it's been covered but Roths are taxed first in first out so you can withdrawal contributions at any time. There are situations& where u can withdrawal earnings and bypass the IRS penalty if it's a qualified distribution. Otherwise earnings grow tax free and are withdrawn tax free after 59 1/2. If you're in a lower tax bracket you may be eligible for a tax credit up to $1000
|
| Back to top | |
chauncey1 
LSU Fan
Member since May 2010
58 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 6:18 am to gatorsimz)
If you are over the contribution limit, there is a loop hole that allows you to contribute to a Roth IRA. You can contribute $5K to a traditional IRA and then roll or convert the $5k over into a Roth. You obviously, won't be able to take the the tax deduction from the traditional, but it essentially allows you to contribute to a Roth with an extra paperwork step.
IRA's are self directed, so you can invest in them how you want. Most retirement advisors don't recommend this, but something I like to do is have MLPs in my roth IRA. One thing to note is you need to manage it so that you aren't making mire than $1,000 in distribution yields/yr or else you'll feel the pain later when you withdraw.I try to stay around $700/yr in distributions just incase. Samething with REIT's.
This post was edited on 9/5 at 6:19 am
|
| Back to top | |
BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
1636 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 6:52 am to Skin)
Skin, were the returns you listed average or actual rates of return? Thanks.
|
| Back to top | |
Cousin 
UTEP Fan
The Bayou
Member since Feb 2012
3074 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 8:29 am to Layabout)
Perfect time for me to read this thread. I am actually planning on opening a ROTH this week. I was looking at the Vanguard Target Retirement 2050 Fund. It requires a minimum of $1,000 and has a low expense ratio of 0.19. Anyone have any good or bad news on this one? I would rather just contribute the money and not have to actively manage my allocations.
|
| Back to top | |
hiltacular 
Georgia Tech Fan
ATL
Member since Jan 2011
5844 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 10:26 am to Cousin)
quote:
Perfect time for me to read this thread. I am actually planning on opening a ROTH this week. I was looking at the Vanguard Target Retirement 2050 Fund. It requires a minimum of $1,000 and has a low expense ratio of 0.19. Anyone have any good or bad news on this one? I would rather just contribute the money and not have to actively manage my allocations.
Can't really say any benefits except I signed up for the exact same fund last week bc of this thread. Well not bc of this thread but this thread confirmed what I wanted to do.
|
| Back to top | |
saderade
New Orleans Saints Fan
America's City
Member since Jul 2005
19684 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 10:35 am to Cousin)
quote:
was looking at the Vanguard Target Retirement 2050 Fund. It requires a minimum of $1,000 and has a low expense ratio of 0.19. Anyone have any good or bad news on this one? I would rather just contribute the money and not have to actively manage my allocations.
I am trying to decide between that one and the 2055 fund right now. Doesn't look like much difference
eta: Just found my answer
quote:
Vanguard recently released a new mutual fund: Vanguard Target Retirement 2055. As you might imagine, it’s basically the same as their existing 2050 fund, but with each of the asset allocation changes scheduled to occur five years further into the future
This post was edited on 9/5 at 10:38 am
|
| Back to top | |
GoCrazyAuburn 
Auburn Fan
Member since Feb 2010
9063 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 10:55 am to saderade)
Make sure you figure out your risk tolerance. Just because you pick a fund that matches your target date, doesn't mean its base allocation is allocated how is best for you.
I realize most of you guys are young here, so you should be more aggressively allocated, but it doesn't hurt to make sure.
|
| Back to top | |
Cousin
UTEP Fan
The Bayou
Member since Feb 2012
3074 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 12:05 pm to GoCrazyAuburn)
Thank you for the advice Sir
This post was edited on 9/5 at 2:03 pm
|
| Back to top | |
Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
36331 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 12:14 pm to CQQ)
LINK
This breaks it down pretty good.
|
| Back to top | |
FinleyStreet 
Georgia Fan
Classiest broad on Broadway
Member since Aug 2011
2096 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 1:04 pm to Catman88)
Is the cap $5k per household or $5k per person?
|
| Back to top | |
Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
36331 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 9/5/12 at 1:15 pm to FinleyStreet)
per person. Im not sure if they have to be different IRA accounts though.
|
| Back to top | |
CQQ
LSU Fan
LC
Member since Feb 2006
6983 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 12/28/12 at 8:50 am to Catman88)
I'm bumping this instead of starting a new thread but before I started this thread, I opened a Fidelity Roth IRA. I don't see anywhere that has a target date fund like you guys are talking about through Vanguard. Does anyone know if they do and if not, can I close this account (haven't contributed anything yet) and open a Vanguard account?
|
| Back to top | |
LSUcam
LSU Fan
Destin FL
Member since Dec 2011
381 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 12/28/12 at 9:42 am to CQQ)
Honestly..
My first investment account was a ROTH through Fidelity. Had a target date fund. Great idea, terrible investment returns when compared to the market.
If you make a 5k contribution with Merrill Edge (online version of Merrill Lynch), you can actually open a free Roth IRA and receive personal financial advising and more tailored investment decisions.
|
| Back to top | |
hiltacular
Georgia Tech Fan
ATL
Member since Jan 2011
5844 posts
| re: Someone Tell Me About Roth IRAs (New ? on Pg 3) (Posted on 12/28/12 at 11:57 am to CQQ)
LINK
target retirement funds = fidelity freedom funds
This post was edited on 12/28 at 11:58 am
|
| Back to top | |
