http://en.wikipedia.org/wiki/Roth_ira
Any broker will let you open a roth ira. I use ameritrade and I'm happy with them. You must select the "ira" account when you open. There are more than one type of "Ira" acount's and the "Roth" is just one of them. I would guess that the roth if what you want.
Here are the list of 5 ira's that Tdameritrade offers:
TD AMERITRADE offers 5 types of IRAs:
Let me know if you have any other questions.
Any broker will let you open a roth ira. I use ameritrade and I'm happy with them. You must select the "ira" account when you open. There are more than one type of "Ira" acount's and the "Roth" is just one of them. I would guess that the roth if what you want.
Here are the list of 5 ira's that Tdameritrade offers:
TD AMERITRADE offers 5 types of IRAs:
- Traditional IRA: A Traditional IRA (also called a Contributory IRA) can be established by an individual to save money for retirement. Contributions are tax deductible (with some exceptions) and withdrawals are taxed. The maximum annual contribution amount is set by the IRS.
- Roth IRA: A Roth IRA is similar to a Traditional IRA, except contributions are taxed and qualified withdrawals are federal tax free.
- Rollover IRA: A Rollover IRA is designed as a holding account for funds distributed from an employer's qualified retirement plan such as a 401(k) or 403(b). Moving funds into a Rollover IRA allows you to return the funds to another qualified plan at a future date.
- Simplified Employee Pension (SEP) IRA: A SEP IRA is for self-employed individuals and for use by small companies for qualified employees.
- Savings Incentive Match Plan for Employees (SIMPLE) IRA: A SIMPLE IRA is an employer-operated savings plan that features employee tax-deferred contributions and matching contributions by the employer. Employers with 100 or fewer eligible employees who do not maintain another retirement plan are eligible to establish a SIMPLE IRA.
Let me know if you have any other questions.
If you are looking for what to invest in the roth ira, I would suggest a mutual fund that covers the s&p 500. You could just buy the stock ticker symbol SPY and that is the same thing. Always reinvest the dividends back into the stock (or mutual fund). The s&p 500 is the 500 largest companies that trade on American exchanges. I wouldn't suggest having only one stock of one company as your retirement account because that is too risky. Any company can be cooking the books and may never be what it seems. People lost their whole retirements because all they had was either one stock (like Enron, Aldelphia or Worldcom) and planned to retire on it.
PS:
I'm not a professional, I'm just giving you layman advice. Always find a professional and read as much as you can until you have a grasp of what you want to do. Some people just aren't cut out for investing in stocks and are much more suited for cd's or bonds.
PS:
I'm not a professional, I'm just giving you layman advice. Always find a professional and read as much as you can until you have a grasp of what you want to do. Some people just aren't cut out for investing in stocks and are much more suited for cd's or bonds.
Solid advice by Hitman so far. There are two considerations to be made here. First, what type of retirement account. Second, what to put into it.
There are a few basic types of retirement accounts. 401k's and IRA's. 401k's are administered by the company you work for. IRA's (Individual Retirement Accounts) are opened by yourself through a company like Fidelity. Both contribute pre-tax money. That is important to know. And what it means, is that you put your money into the account BEFORE paying tax on it. So if you are taking home $1000 per check after taxes now, and you decide to start putting in $100 to a 401k or IRA, you will still take home about $910 -- see, you'll save a little bit because you're not paying taxes on that. Anything you put into the accounts will grow and grow until you retire (at 60 years old), then you have to pay taxes on it when you take it out.
The second type of account is a Roth 401k or Roth IRA. In those, you put money in AFTER tax. So if you take home $1000 now, you can put $100 in there and take home $900. The good thing is, once you get that money into the Roth account, it's out of Uncle Sam's hands forever.
The choice to be made between the two (Roth or Regular) is a tough one. Basically, it depends on if you think you'll be in a higher tax bracket now or when you retire. That's a question you'll have to answer.
Ok, so that's the first decision. Now that you have the account, it's time to decide what to put into it. Hitman is right that an S&P 500 index fund is a great choice. There are also funds built specifically for retirement accounts, they will ususally be called something like "Retirement Fund 2050", and the year is when you expect to retire. It will be managed more aggressively when you're young, and more conservatively when you get close to taking the money out.
If your company is big enough to offer retirement accounts, ask whomever is in charge of it, they will help much more than we can. But you're definitely doing the right thing getting started NOW. It's a game of compounding interest, and the sooner you start rolling that snowball down the hill, the bigger the ball will be once it gets to the bottom.
There are a few basic types of retirement accounts. 401k's and IRA's. 401k's are administered by the company you work for. IRA's (Individual Retirement Accounts) are opened by yourself through a company like Fidelity. Both contribute pre-tax money. That is important to know. And what it means, is that you put your money into the account BEFORE paying tax on it. So if you are taking home $1000 per check after taxes now, and you decide to start putting in $100 to a 401k or IRA, you will still take home about $910 -- see, you'll save a little bit because you're not paying taxes on that. Anything you put into the accounts will grow and grow until you retire (at 60 years old), then you have to pay taxes on it when you take it out.
The second type of account is a Roth 401k or Roth IRA. In those, you put money in AFTER tax. So if you take home $1000 now, you can put $100 in there and take home $900. The good thing is, once you get that money into the Roth account, it's out of Uncle Sam's hands forever.
The choice to be made between the two (Roth or Regular) is a tough one. Basically, it depends on if you think you'll be in a higher tax bracket now or when you retire. That's a question you'll have to answer.
Ok, so that's the first decision. Now that you have the account, it's time to decide what to put into it. Hitman is right that an S&P 500 index fund is a great choice. There are also funds built specifically for retirement accounts, they will ususally be called something like "Retirement Fund 2050", and the year is when you expect to retire. It will be managed more aggressively when you're young, and more conservatively when you get close to taking the money out.
If your company is big enough to offer retirement accounts, ask whomever is in charge of it, they will help much more than we can. But you're definitely doing the right thing getting started NOW. It's a game of compounding interest, and the sooner you start rolling that snowball down the hill, the bigger the ball will be once it gets to the bottom.
While this is good advice as well, I think it is probably a waste of money for just starting up a retirement acct. Financial planners are helpful if you are investing several tens or hundreds of thousands of dollars...and they take a nice chunk out of that. The majority of money mgrs that I see stats on have mediocre ROI %. Few are actually worth the premium, but they could benefit you in terms of your taxes from unrealized/realized gains and losses. But that is years away.
Call someone like Fidelity. They will help you set up your IRA for free.
Or you can easily setup your 401K through your work.
Do a little research yourself and manage your own portfolio as well. You can set it up for weekly, monthly, quarterly, or annual changes.
Yes, for the most part you can buy what you want in an IRA. I do not believe that you can buy art or real estate but as far as stocks/bonds go I believe that you can buy almost anything. The rate of return question is a difficult question to answer since it all depends on what you invest in. Considering how young you are, I would be aggressive and look at putting a larger chunk of your money into small-cap growth stock(s)/mutual fund(s). Personally, I buy small cap stocks individually but if you do not have any knowledge regarding individual stocks/companies then you will probably be better served putting your money into a mutual fund. Small cap growth funds/stocks are high risk/high reward so if you can stomach the volatile swings then that is what you should do. Either way, good luck. It is very wise to start investing as young as possible.
Invest in small cap stocks/international stocks if your young, you aren't trying to grind 5-9% in your early years. You can take chances and try to hit some homeruns. Just be sensible about it...Also, you want to make sure the IRA can be used to purchase real estate down the line because that is a very good advantage of an IRA.
If I were doing a Roth ira at a young age Iwould buy a mid-cap value fund. Over time they seem to have the best over all performance. The second year I would put some into international funds. I assume you are going to use a ameritrade fidelity type firm they all have a list of no-load funds and should be able to help you. Just buy them forget them and they should work out in time. I work on the other side of the fence and have been a broker for 25+ years. I do this type of investing for my young clients dont trade it just let it grow. good luck heart222
