IRA Rollover

Posts Tagged ‘investing’

Question: WHAT IRA TO CHOOSE AND WHY?

alright, i’ve decided for awhile now that i need to open up an IRA. i’m 19, and feel that it would be awesome to open one up at my age. i did a little bit of research and decided that a ROTH IRA seemed to be worth its weight in gold, and that i would open it up at an Edward Jones office, which is run by someone i know and trust. but now having read some other things i’m not so sure. i’m hearing other options like “rollover IRA” and seeing all thse options of WHERE i can open it up.
what IRA is going to get me the most gain safely, and where should i do it? i liked the thought of a ROTH (seeing how i pay taxes on it while i invest, not when i go to cash it at the ripe age of 59) but can someone tell me the difference between different IRA’s and which is the best one to go for based on the most gain…safely?

Answer: Rollover IRA = Retirement money that used to be in a different kind of retirement account. Doesn’t apply to you.

Traditional IRA = Tax benefits now for moderate to low income folks. Only option for highest income folks ** some exceptions apply.

ROTH IRA = no tax benefits now. Can take out your contributions w/o penalty after the account is 5yrs old. Tax free withdrawal of returns in retirement ** assuming congress never changes its mind.

General advice. Contribute to a Traditional IRA as long as you get some tax benefit (now); then switch to a Roth IRA. Never open an IRA at a full service broker (like Edward Jones) or a bank, because they will give you lousy options and charge you through the nose for it.

If you can hit the $5000 a year limit for this year and next, I would recommend you set up your account at Vanguard.com investing in the Target Retirement fund for your age bracket.

If you can’t swing that just yet, try a savings IRA at INGDirect.com until you get your balances up. Then you can transfer then to Vanguard.

Either way, you will be way ahead of everyone else your age.

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