General Question

Spargett's avatar

Any advice on setting up your first IRA account?

Asked by Spargett (5343 points ) September 28th, 2007 from iPhone

I’m looking into getting on started, I’ve been saving for quite a while and I think its time to start looking closer at what I can do with my savings. I’ll prob go with a Roth IRA, but I’d love to hear what you have to say.

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6 Answers

sdeutsch's avatar

I don’t know a lot about IRAs, but I Will Teach You To Be Rich is a great resource for learning about finances and investments. Just go there and search for “Roth IRA” and you’ll come up with lots of articles.

Also, I know ING one of the lowest minimum investment requirements for IRAs, so depending on how much money you want to start out with, they’re a good place to check into. They’ve also got some good basic FAQ on IRAs on their website.

Poser's avatar

Roth IRA’s are great for people just starting out in investing. Because you put in after-tax income, you never pay taxes on what you take out. You can choose what type of fund you wish to invest in, from something with lower risk—and therefore lower return—to something higher risk and higher return. Conventional wisdom says to invest with greater risk while you’re young, and gradually lower your risk as you approach retirement age.

Another good site is Clark Howard’s website. He’s got lots of info on everything from investing to saving money.

Spargett's avatar

“Conventional wisdom says to invest with greater risk while you’re young, and gradually lower your risk as you approach retirement age.”

That’s interesting. I would have assumed it would be the other way around, since at a younger age you can’t really afford to loose what little money you have, and as an older person you have more investments, which keeps you solid if one or two high risks don’t pan out.

manahouri's avatar

“That’s interesting. I would have assumed it would be the other way around, since at a younger age you can’t really afford to loose what little money you have, and as an older person you have more investments, which keeps you solid if one or two high risks don’t pan out.”

‘Afford’ means that if you lose it, you’ll still be okay in life. When you’re young, you’re healthy and able-bodied and therefore able to generate income. When you’re old, you need to avoid losing anything and you don’t have as much need to increase income, just keep it incoming.

bolwerk's avatar

Do it offshore.

plethora's avatar

Definitely a ROTH and do it now. Given the date of this question, hopefully, you have already done it. If not, start now. This example works at just about any age, but I’m assuming you are young. Let’s just say you are 22 and you invest $2,000/yr for 8 years and then stop and invest no more….while at the same time another person 22 yrs old defers starting until he is 30 and then invests $2,000/yr for the next 35 years until he is 65. Assuming the same rate of earnings for both of you, YOU will have more money than he at age 65. IT PAYS TO START EARLY.

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