Retirement Investment, IRA, Roth IRA... ??

[Supplicate]

Anyone on here have suggestions on what to start up for retirement investment?

I've been eyeballin the Roth IRA's for about four years now, and am ready to pull the trigger on one here shortly. But the question is, is this the smart idea?

I know some people decide to do the investing themselves instead of setting up an IRA, but that seems to me like a recipe for trouble if the markets you've been investing in decide to take a tumble. But, its all about calculated risk, no?

 

[Mafesto]

I would recommend using a reputable investment firm.
Sure you will be paying them commission. But they more than likely will earn it.

In the late 90's a retarded monkey could pick his own stocks & trade frequently & make good coin, but those days are gone.

As far as IRA vs Roth IRA...............

IRA gets invested pre-tax, meaning you will not pay income tax on it now, but you will pay income tax when you withdraw.
(an excellent opportunity if you are in a higher tax bracket)

Roth IRA is invested post tax, meaning there is no immediate tax benefit.
However, you will pay no income tax when you withdraw. This is huge since it shelters the gains from taxation.

I don't recommend either or, I recommend BOTH.
Do at least 10 % of your income, more if you can afford it.

But, I am no expert & you need to work with a professional.

 

[Supplicate]

I don't recommend either or, I recommend BOTH.
Do at least 10 % of your income, more if you can afford it.

Yeah, when I can afford it I'm planning on doing both. At this point in time when paychecks may or maynot be there on payday and managment seems to feel they can change your hourly wage at whim I'd rather just play it safe with one. And at the current annual max for a Roth IRA being 4k (5k a year at midnight tonight) it shouldn't be too hard to scrape up enough per month to max it out.

and IIRC, the traditional IRA isn't limited as to a max dollar amount you can invest other then it cannot equal the amount you earned in that fiscal year.

Edit: nevermind, just looked up the traditional IRA and they are limited to a max of 5k as of 2008 as well (4k previously). Must have been reading about a different investment that had no limit.

 

[NDflatlander]

I believe there are income maximums for Roth IRA's which in 07 was $90K per year.

 

[Fosgate]

I would advise you to see an investment advisor to look at everything with you. Any half way respectable advisor will want perform a risk analyst on you. In order for them to recommend something for you legally they have to under rule "Know your Customer" in accordace with their series 7 or 6 and 63 licenses. They'll be able to look at your whole financial future and help you make the decision of what investment will perform as you expect it and also explain some of advatages and disadvatages of each. But also you should consider an overall approch to your risk management (Insurance, etc) and Investments. But I would not recommend pouring money into investments and your not properly covering yourself and your family against loss and if any inheretance is coming down to make sure a plan is in action to bypass the probate process and transfer smoothly.

 

[redlineguy]

I believe there are income maximums for Roth IRA's which in 07 was $90K per year.

I think it's higher than that if single and like 165K if married but that law sunset's in 2009 or 2010, till then you can put it in a non qualified fund then roll it into the Roth in 09 or 10 when the law changes.

Find one that has American Funds ( the best IMO ) for choices and you will do VERY well. I like the Roth for you first, one reason being Taxes, I don't think they will be going down anytime soon so down the road it will come out as Tax free money when Taxes are even higher then now. If you max that out every year there are other options to look into but try to max the Roth out first every year.

Either way though It is a VERY good Idea to start saving as mush as you can. If you get a Job that has a 401K you can put in $15,500 for 07 and the same for 08 and if they do anything it goes on top of that like I do for my people, They get between 3% and 5% of what they made put into there 401k on top of what they put in but sadly most don't and the ones that do don't do a lot.

Good luck.





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[redlineguy]

One thing DON'T get sucked into a life Insurance investment policy, THEY SUCK IMO!!!!

 

[niner49]

^^^^X2

RLG and I always seem to agree on this one fur sure!

American Funds, max out your ROTH for starters!

 

[Mike562]

If you can afford to pay the taxes up front the Roth would save you a bundle in the long run. The link is to a Schwab fund which would give you exposure to several index's all in one fund.

http://prospectus-express.newriver.com/pedelivery/schwab/808509509_pros.pdf