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How do I start a Roth IRA?
Posted on 5/8/15 at 10:57 am
Posted on 5/8/15 at 10:57 am
Shame on me for starting this late in the game, but I would like to get a grip on my financial savings for the future.
I am 28 years old, wife is 30.
I have always seen yall talk about "maxing Roth IRA first".
What is the best way to start an account?
I understand that the limit to contribute is $5500 per year?
What determines the growth rate percentage?
I have tried to use Google to get this information, but I am having to sift through so much information I am getting lost.
Thank you.
I am 28 years old, wife is 30.
I have always seen yall talk about "maxing Roth IRA first".
What is the best way to start an account?
I understand that the limit to contribute is $5500 per year?
What determines the growth rate percentage?
I have tried to use Google to get this information, but I am having to sift through so much information I am getting lost.
Thank you.
7
Posted on 5/8/15 at 11:00 am to Polar Pop
Roth IRA is simply a retirement account that is after tax money. When you take it out after 55 it will not be taxed. You can open this account with any brokerage. What you invest in that account will determine your ROI.
Posted on 5/8/15 at 11:00 am to Polar Pop
Go to vanguard.com and click on open an account. They have great funds and low low expenses. This will get you started.
ETA start a monthly deposit or whatever you're comfortable with on the contributions. There is a risk profile questionnaire that will give you a good idea of your tolerance and they will have funds you can pick from based on that. Just read about the ones they show you and pick one.
Also, don't look at it everyday. You'll drive yourself crazy.
ETA start a monthly deposit or whatever you're comfortable with on the contributions. There is a risk profile questionnaire that will give you a good idea of your tolerance and they will have funds you can pick from based on that. Just read about the ones they show you and pick one.
Also, don't look at it everyday. You'll drive yourself crazy.
This post was edited on 5/8/15 at 11:05 am
Posted on 5/8/15 at 11:01 am to Polar Pop
vanguard.com
Posted on 5/8/15 at 11:04 am to coachLSU
Thank you all so much.
Do I just open 1 joint account for both of us to contribute a max of $5500/year or do you split them?
Posted on 5/8/15 at 11:05 am to Polar Pop
If she has an income she can have one as well. Each of you can contribute the max, so $5,500 each.
This post was edited on 5/8/15 at 11:06 am
Posted on 5/8/15 at 11:16 am to Polar Pop
quote:
Do I just open 1 joint account for both of us to contribute a max of $5500/year or do you split them?
if you can max out 2, then open 2 accounts and max them both out
Posted on 5/8/15 at 11:18 am to Polar Pop
Definitely open up two if you can so you can then contribute up to $11,000.
Growth is based on which fund(s) you select.
Balanced funds with nearly even splits between stocks and bonds will have less volatility.
Funds composed of 80-90% stocks might me down 25% one year and up 35% the next, though this is not typical.
I would indexfrom the beginning if I were you. You need $3,000 to contribute to an index fund like the S&P 500, which has supposedly averaged around 12% annually since 1926. VFINX is the ticker. Can't link from work.
Growth is based on which fund(s) you select.
Balanced funds with nearly even splits between stocks and bonds will have less volatility.
Funds composed of 80-90% stocks might me down 25% one year and up 35% the next, though this is not typical.
I would indexfrom the beginning if I were you. You need $3,000 to contribute to an index fund like the S&P 500, which has supposedly averaged around 12% annually since 1926. VFINX is the ticker. Can't link from work.
Posted on 5/8/15 at 12:07 pm to thatguy777
quote:
When you take it out after 55 it will not be taxed
This is incorrect information.
All distributions after age 59 1/2 will not be subject to tax and/or penalty.
You can always take your contributions out tax-free.
Posted on 5/8/15 at 12:27 pm to Polar Pop
quote:
Do I just open 1 joint account for both of us to contribute a max of $5500/year or do you split them?
it is an individual retirement account
Posted on 5/8/15 at 12:52 pm to Polar Pop
Send me the money. I will set you up
But seriously. It's been said. Vanguard and open two accounts.
But seriously. It's been said. Vanguard and open two accounts.
This post was edited on 5/8/15 at 1:16 pm
Posted on 5/8/15 at 1:56 pm to Fat Bastard
Thank you again for the responses. I will look tonight at setting the accounts up on the Vanguard website and also setting up a Mint account to track money in general.
Time to get in gear, better late than never.
Posted on 5/8/15 at 2:38 pm to Polar Pop
If you file taxes jointly it doesn't matter if your spouse has any income or not...you can make the contribution for them.
Posted on 5/8/15 at 7:02 pm to Polar Pop
quote:
Time to get in gear, better late than never.
meh. you are still a baby. you are still very young. you will be fine. Just think if you were 40! or 50! or 60! Remember, most people have nothing more than SS to live on and never planned for retirement. Most everybody on this board is in the 1% knowledge wise. This board is part of the exception to the rest of the country as a whole. good luck!
This post was edited on 5/8/15 at 7:05 pm
Posted on 5/8/15 at 8:20 pm to thatguy777
59 1/2 is the magical age to where you can actually touch your money w/out penalty. The government made 5.1 billion dollars last year on people trying to access qualified accounts---I guess locking your money up is the norm.
Posted on 5/8/15 at 8:24 pm to bayoubengals88
The s&p has not averaged a 12% return since 1926.
Please google s&p 500 cagr ( compounded annual growth returns) and you can find www.moneychimp.com
It is interesting stuff.
Never look at averages in regards to the stock market..it doesn't tell the real story of how your money moves.
Please google s&p 500 cagr ( compounded annual growth returns) and you can find www.moneychimp.com
It is interesting stuff.
Never look at averages in regards to the stock market..it doesn't tell the real story of how your money moves.
Posted on 5/8/15 at 8:37 pm to coachLSU
Can Vanguard be setup for automatic direct deposits from one's paycheck?
Are the target retirement date funds available?
Thanks.
Are the target retirement date funds available?
Thanks.
Posted on 5/8/15 at 8:49 pm to player711
quote:
59 1/2 is the magical age where you can actually touch your money w/out penalty. The government made 5.1 billion dollars last year on people trying to access qualified accounts---I guess locking your money up is the norm.
Roth contributions can be withdrawn without penalty at any time. Earnings are subject to penalty if withdrawn before 59.5. TIRAs are different.
Posted on 5/8/15 at 8:52 pm to weagle99
quote:
Can Vanguard be setup for automatic direct deposits from one's paycheck?
Are the target retirement date funds available?
Thanks.
I think this depends on your employer. Most people just set up automatic transfers from checking directly into Vanguard.
Yes, Target Retirement date funds can be funded this way. It's what I do, very easy.
Posted on 5/8/15 at 8:57 pm to Sigma
Cool. Thanks.
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