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Opening Roth IRA
Posted on 12/17/18 at 4:51 pm
Posted on 12/17/18 at 4:51 pm
Im a college student currently with a good PT job/internship that I work a decent amount at. I want to open a Roth IRA and start contributing a little. Any advice on who to open it with, investing advice, or just advice on IRA's in general?
TIA.
TIA.
2
Posted on 12/17/18 at 5:00 pm to Wes225
Vanguard Index 500 or Vanguard Total Stock Market Index - not a lot of difference in them. Start with one of these in a Roth IRA. Don't worry about the amount. Just put in whatever you are comfortable with. Contribute every pay day or monthly.
I've got three children and I started an IRA for each of them while they were working part time in high school. The earlier you start the better.
I've got three children and I started an IRA for each of them while they were working part time in high school. The earlier you start the better.
Posted on 12/17/18 at 5:24 pm to Wes225
One feature of a Roth that some overlook is that it's a great place to get your emergency fund started because you can pull out up to what you've put in with no penalty at all.
Say you contribute $500 this year and $600 in 2019, and over that time you earned $100 in interest so you have $1200 at the end of 2019. You can pull out up to $1100 with no penalty at all if you need to. If you had put it in a savings account instead your $100 interest would be subject to income tax. But in a Roth all gains are tax free.
If you go this route be sure to keep whatever portion you consider emergency funds invested very conservatively - you don't want a market turndown to hit right when an emergency happens. When I say "conservatively" I really mean short term bond funds or the like instead of stocks. Once you build up enough to take care of your e-fund needs you can start investing in stocks instead.
Say you contribute $500 this year and $600 in 2019, and over that time you earned $100 in interest so you have $1200 at the end of 2019. You can pull out up to $1100 with no penalty at all if you need to. If you had put it in a savings account instead your $100 interest would be subject to income tax. But in a Roth all gains are tax free.
If you go this route be sure to keep whatever portion you consider emergency funds invested very conservatively - you don't want a market turndown to hit right when an emergency happens. When I say "conservatively" I really mean short term bond funds or the like instead of stocks. Once you build up enough to take care of your e-fund needs you can start investing in stocks instead.
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