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12/6/2019 7:27:02 PM
Posted: 12/12/2013 11:35:01 AM EST
Looking to start a retirement fund (at the ripe age of 26) so I am not boned by the time I want to retire. My company puts money into my trust every year, hoping by the time I plan to retire 40 years I will be in the million dollar club there.

But back to the Roth IRA, I am looking at Fidelity. Basically I just want to have them take $500 a month out of my paycheck and put it into that Roth account. Is Fidelity the best for this, who is everyone using?
Link Posted: 12/12/2013 11:36:05 AM EST
Check out Vanguard. Low fees
Link Posted: 12/12/2013 11:36:12 AM EST
Fidelity is fine. Check out Charles Schwab.
Link Posted: 12/12/2013 11:37:55 AM EST
See I have no clue about any of this shit. When you say "fee" you don't mean a fee to actually open and have the account, you mean fee if I choose to withdraw the money from the Roth IRA at any point in time except for when I retire?
Link Posted: 12/12/2013 11:39:01 AM EST
Check out what you can do with Roth IRAs for your future grandchildren, assuming you're so inclined.

http://www.bankers-anonymous.com/blog/the-magical-roth-ira/
Link Posted: 12/12/2013 11:40:43 AM EST
[Last Edit: 12/12/2013 11:43:26 AM EST by California_Kid]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
See I have no clue about any of this shit. When you say "fee" you don't mean a fee to actually open and have the account, you mean fee if I choose to withdraw the money from the Roth IRA at any point in time except for when I retire?
View Quote

Fees are charged for transactions (trades). Fidelity charges nothing to open an account, and $7.95 per trade.

https://www.fidelity.com/retirement-ira/ira/roth-ira

If you withdraw early, you pay tax penalties to the IRS and your state.

The most important thing to understand about a Roth IRA is that you are saving post-tax dollars - You have already paid income tax or capital gains on the money, and (unless Congress does something really ugly) won't be taxed again when you withdraw the money. In other words, your earnings are (federally) tax-free, and you are sheltered from any future increase in income tax rates (again, unless Congress does something really ugly).
Link Posted: 12/12/2013 11:40:44 AM EST
What level of investment knowledge do you have (if any)?

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?


Link Posted: 12/12/2013 11:43:37 AM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By jmarthsr:
Check out Vanguard. Low fees
View Quote


+1-hard to beat the low management fees on their index funds.
Link Posted: 12/12/2013 11:44:08 AM EST
[Last Edit: 12/12/2013 11:53:00 AM EST by testify4]
$500/mo will be over the contribution limit for your age on a Roth IRA (ETA: If you are single.)

I'd max out the Roth, paying your taxes upfront and keep it going long term.

You may want to look in to a financial planner. The post above asks questions your planner would, so consider those if you want to solo it. (Investment time, acceptable risk, goals, etc.)
Link Posted: 12/12/2013 11:44:20 AM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
See I have no clue about any of this shit. When you say "fee" you don't mean a fee to actually open and have the account, you mean fee if I choose to withdraw the money from the Roth IRA at any point in time except for when I retire?
View Quote


Management fees.

If you have two "S&P500" index funds they are both supposed to return
the same as the S&P500 does. The difference is that one might have
management fees .1% or .2% (for example) higher than the other.

That sounds like nothing. However over a lifetime of investing small
changes in return can result in large changes in the ending balance
due to compounding. Google "future value calculator" and see what
the value of $500/mo invested for 40 years is based on different average
returns and you will see.

Vanguard & Fidelity have always had pretty reasonable fees AFAIK - Vanguard
is kind of the industry leader in low fee mutual funds.
Link Posted: 12/12/2013 11:45:22 AM EST
I do not claim to know a whole lot but.

I have a Roth with Edward Jones, and the Class A Mutal Funds charge 4.75% to buy but only .5% a year to manage.

Chances are there is a better deal for me out there, So I am all ears..
Link Posted: 12/12/2013 11:47:29 AM EST
[Last Edit: 12/12/2013 11:47:43 AM EST by skytrooper01]
Put Deployment money in, in 5 years it is ALOT more - No taxes and i put little bits in a month

Roth IRA is the way to . Make money on money on money
Link Posted: 12/12/2013 11:48:14 AM EST
Vanguard Target Retirement fund.
Link Posted: 12/12/2013 11:48:26 AM EST
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.
Link Posted: 12/12/2013 11:50:55 AM EST
[Last Edit: 12/12/2013 11:51:45 AM EST by makintrax73]
Err...mistake

You want "future value of annuity calculator" (where an "annuity" is considered any amount regularly contributed over evenly spaced periods)

Like this: FV Annuity Calculator

5000 per year
5% return
40 years = $603k

6% return = $773k

The power of compounding!
Link Posted: 12/12/2013 11:54:17 AM EST
So is Roth IRA from Fidelity what I want for what I am looking for? Just putting the max I can for my age into a retirement fund? Not intersted in stocks/trading just yet.
Link Posted: 12/12/2013 11:55:07 AM EST
[Last Edit: 12/12/2013 11:56:28 AM EST by ronnl001]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.
View Quote


Again:

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?

You're limited to $5500 per year in a Roth. If you want to do it yourself, you can use something like ScottTrade and manage it however you want. You can also use a traditional broker. I'd recommend a mix of growth right now. I'm a permabear, but this bull train appears to still be running strong and I have only made money betting with it. I like PIMCO total return, and have made quite a bit with it.

At your age, depending on your projected income, I might also look into a whole life policy. You can get something that will work for you for a long time started now, and there are tax advantages to using a policy as an investment vehicle that you can't get elsewhere. A lot of that is income dependent, however, and higher tax brackets benefit more.

Bottom line: I would find a reputable fee-for-services financial planner, schedule a meeting, and talk to them. You will pay a couple of months of those planned contributions, but that is definitely the way to go.
Link Posted: 12/12/2013 11:58:33 AM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.
View Quote


Well when you put money into the Roth IRA, you are buying/trading shares of whatever you put your money towards. To make it easy put it in a target retirement fund, they are adjusted over time to be less risky when you age. They will have a date in the fund name that you match up with the date around when you will retire, for example Fidelity Freedom Fund 2050.

Link Posted: 12/12/2013 11:59:49 AM EST
[Last Edit: 12/12/2013 12:00:37 PM EST by evenflow]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ronnl001:


Again:

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?

You're limited to $5500 per year in a Roth. If you want to do it yourself, you can use something like ScottTrade and manage it however you want. You can also use a traditional broker. I'd recommend a mix of growth right now. I'm a permabear, but this bull train appears to still be running strong and I have only made money betting with it. I like PIMCO total return, and have made quite a bit with it.

At your age, depending on your projected income, I might also look into a whole life policy. You can get something that will work for you for a long time started now, and there are tax advantages to using a policy as an investment vehicle that you can't get elsewhere. A lot of that is income dependent, however, and higher tax brackets benefit more.

Bottom line: I would find a reputable fee-for-services financial planner, schedule a meeting, and talk to them. You will pay a couple of months of those planned contributions, but that is definitely the way to go.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ronnl001:
Originally Posted By evenflow:
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.


Again:

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?

You're limited to $5500 per year in a Roth. If you want to do it yourself, you can use something like ScottTrade and manage it however you want. You can also use a traditional broker. I'd recommend a mix of growth right now. I'm a permabear, but this bull train appears to still be running strong and I have only made money betting with it. I like PIMCO total return, and have made quite a bit with it.

At your age, depending on your projected income, I might also look into a whole life policy. You can get something that will work for you for a long time started now, and there are tax advantages to using a policy as an investment vehicle that you can't get elsewhere. A lot of that is income dependent, however, and higher tax brackets benefit more.

Bottom line: I would find a reputable fee-for-services financial planner, schedule a meeting, and talk to them. You will pay a couple of months of those planned contributions, but that is definitely the way to go.


What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized.
Link Posted: 12/12/2013 12:01:07 PM EST
[Last Edit: 12/12/2013 12:06:34 PM EST by mcgredo]
There's the institution that keeps track of your account (apparently Fidelity in your case) and what you invest your account in.

Without knowing any details, it's likely that your account is handled by Fidelity and you can invest in whatever Fidelity offers, which can be stocks, Gold, cash, or whatever.

At your age, just buy a very low overhead index fund that matches the entire market, something like the Vanguard Total Market. They buy a basket of all the publicly traded stocks in the US designed to reflect the overall performance of the US stock market. They charge something like 0.05% of invested funds per year for overhead. That compares to about 1% for an average actively managed fund. Reducing fees by 1% adds up to a lot of money over 30 years, and index funds perform better than almost all actively managed mutual funds anyway.

After a few years you can start worrying about asset allocation, how much you want in bonds vs stocks, and so on.

If you want very low risk and very low returns keep it in a money market account. You'll get, literally, zero return.
Link Posted: 12/12/2013 12:03:41 PM EST
If you have USAA access (and if you're not sure it might be worth calling them if you have a parent or sibling in the military, just to see), you can set it up through them. I talked with the planner for a couple of hours when we set mine up just to make sure I had all my questions answered. It's been a good experience thus far.
Link Posted: 12/12/2013 12:07:18 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:


What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
Originally Posted By ronnl001:
Originally Posted By evenflow:
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.


Again:

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?

You're limited to $5500 per year in a Roth. If you want to do it yourself, you can use something like ScottTrade and manage it however you want. You can also use a traditional broker. I'd recommend a mix of growth right now. I'm a permabear, but this bull train appears to still be running strong and I have only made money betting with it. I like PIMCO total return, and have made quite a bit with it.

At your age, depending on your projected income, I might also look into a whole life policy. You can get something that will work for you for a long time started now, and there are tax advantages to using a policy as an investment vehicle that you can't get elsewhere. A lot of that is income dependent, however, and higher tax brackets benefit more.

Bottom line: I would find a reputable fee-for-services financial planner, schedule a meeting, and talk to them. You will pay a couple of months of those planned contributions, but that is definitely the way to go.


What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized.


The last part is basically true, however, your limit is actually $5500 annually now. You might look at taking on something with some risk, even if it's low, as a way to grow your money. BTW a Roth IRA is just a retirement investment account. Within it, you can put your money into mutual funds, stocks, bonds, etc, Roth IRA just describes the rules that govern you investment account. At least that's how I understand it.
Link Posted: 12/12/2013 12:09:49 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized.
View Quote


I am just going to say, that with 0 risk, you are going to get almost no growth compared to an invested Roth. If all you want is zero risk, your local credit union can set up the Roth for you. If later you change your mind, you can have the money moved to a place to invest it.
Link Posted: 12/12/2013 12:10:23 PM EST
Fidelity is what my employer uses...so for me to get the matching contribution I have to use it....so far its done well.
I too elected for Roth, due to my age and I have no hopes of taxes being lower than they are today.
Link Posted: 12/12/2013 12:10:37 PM EST
Fidelity is what my employer uses...so for me to get the matching contribution I have to use it....so far its done well.
I too elected for Roth, due to my age and I have no hopes of taxes being lower than they are today.
Link Posted: 12/12/2013 12:11:49 PM EST
[Last Edit: 12/12/2013 12:13:03 PM EST by makintrax73]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:

What is your risk tolerance?

0, I want no risk.

View Quote


You need to spend some time educating yourself on investments. I'm not trying to be patronizing I promise!

ALL investments involve risk. EVERY SINGLE ONE.

Example:

People call short term treasury bonds "risk free" - just like FDIC insured bank accounts.
Well, what happens when inflation is going 3% per year and that "risk free" investment is
getting you less than 1%? Suddenly "risk free" looks a lot more risky - like the risk that
what the investment is actually worth is less than what you put in (in terms of buying power).

If you refuse to accept risk you will never reach your investment goals.
Link Posted: 12/12/2013 12:11:57 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By crurifragium:


+1-hard to beat the low management fees on their index funds.
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Originally Posted By crurifragium:
Originally Posted By jmarthsr:
Check out Vanguard. Low fees


+1-hard to beat the low management fees on their index funds.



+2
Link Posted: 12/12/2013 12:12:54 PM EST
Just spend your money on cool shit and then throw your hands up in the air when you're 65, saying it's not fair Social Security isn't enough, thanks to Corporate America.

Seriously- Sock away as much as you can when you're young.
Link Posted: 12/12/2013 12:13:03 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By chvylvr350:


I am just going to say, that with 0 risk, you are going to get almost no growth compared to an invested Roth. If all you want is zero risk, your local credit union can set up the Roth for you. If later you change your mind, you can have the money moved to a place to invest it.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By chvylvr350:
Originally Posted By evenflow:
What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized.


I am just going to say, that with 0 risk, you are going to get almost no growth compared to an invested Roth. If all you want is zero risk, your local credit union can set up the Roth for you. If later you change your mind, you can have the money moved to a place to invest it.


I would reiterate: go see a fee-for-services financial planner. They can give you all the advice you need, and have no financial motivation to sell you on anything in particular. This is not true of stock brokers. I have made this mistake before, and it is costly.
Link Posted: 12/12/2013 12:15:01 PM EST
I have Fidelity for my Roth IRA, IRA (401K rollover from previous empl), 401K, company stock, and company stock options.
No issues with Fidelity. Take a class at a local community college on investing and learn about the different options for investing (I won't trust the fund advisors...). Get a few grand in there first then look at mutual funds, index funds, sectors, straight stock...what ever. Know what the fees are and how to find a good fund manager.

Heard good things about Vanguard also.

Good luck, I started where you are 25 years ago.
Link Posted: 12/12/2013 12:15:37 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By jmarthsr:
Check out Vanguard. Low fees
View Quote


+1 Vanguard is awesome and definately has low fees/expense ratios. They also have a wide variety of mutual funds for you to invest your ROTH IRA funds in.

I highly recommend them.
Link Posted: 12/12/2013 12:17:23 PM EST
Open a brokered account. I have both a brokered account where they charge a fee to manage it, and one that is pretty much plug and play (pick mutual funds and leave it alone, no fees). Net of fees, the brokered account has outperformed the other by a couple of points. Since you are young, go high risk. You have plenty of time to ride out any dips in the market.

Once you max out what you can contribute to a Roth, look into a whole life policy. It is the only other investment vehicle where your money grows tax free.
Link Posted: 12/12/2013 12:18:02 PM EST
Originally Posted By evenflow:
Looking to start a retirement fund (at the ripe age of 26) so I am not boned by the time I want to retire. My company puts money into my trust every year, hoping by the time I plan to retire 40 years I will be in the million dollar club there.

But back to the Roth IRA, I am looking at Fidelity. Basically I just want to have them take $500 a month out of my paycheck and put it into that Roth account. Is Fidelity the best for this, who is everyone using?
View Quote


Think hard about that "million dollar club".

A million isn't enough to retire well on right now. By the time you're 70 that's going to be the equivalent of maybe 200k now.

I'm 25, i've done 4% with 4% match since I got out of high school. That account is just there to cash in if I lose my job. I have some leveraged rental properties that I consider my true retirement. Atleast with leveraged real estate the inflation will work for you moreso than most stock type investments.

Not trying to rain on your parade, just want to put the option out there. My investment advisor tried to get me to put more money in. I like to argue so I sat down with him and we discussed it. He couldn't prove to me on paper that it was a good deal unless we took inflation out of the equation.

Another thing i've done some with that you might look at is a solo401k or other self directed 401k. I have bought one property with my solo401k trust fund. The only downside is I can't do any self dealing. I have to hire a property management company to handle it for me.
Link Posted: 12/12/2013 12:20:15 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By makintrax73:


You need to spend some time educating yourself on investments. I'm not trying to be patronizing I promise!

ALL investments involve risk. EVERY SINGLE ONE.

Example:

People call short term treasury bonds "risk free" - just like FDIC insured bank accounts.
Well, what happens when inflation is going 3% per year and that "risk free" investment is
getting you less than 1%? Suddenly "risk free" looks a lot more risky - like the risk that
what the investment is actually worth is less than what you put in (in terms of buying power).

If you refuse to accept risk you will never reach your investment goals.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By makintrax73:
Originally Posted By evenflow:

What is your risk tolerance?

0, I want no risk.



You need to spend some time educating yourself on investments. I'm not trying to be patronizing I promise!

ALL investments involve risk. EVERY SINGLE ONE.

Example:

People call short term treasury bonds "risk free" - just like FDIC insured bank accounts.
Well, what happens when inflation is going 3% per year and that "risk free" investment is
getting you less than 1%? Suddenly "risk free" looks a lot more risky - like the risk that
what the investment is actually worth is less than what you put in (in terms of buying power).

If you refuse to accept risk you will never reach your investment goals.


I always tell people that those types of risk free investments are truly risk free. You can garrantee 100% without a doubt that you will lose money on them. If you're not making 3-4% a year in "return" then you are losing value with inflation, as you mention.
Link Posted: 12/12/2013 12:29:15 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By frankiebagadonuts:
Open a brokered account. I have both a brokered account where they charge a fee to manage it, and one that is pretty much plug and play (pick mutual funds and leave it alone, no fees). Net of fees, the brokered account has outperformed the other by a couple of points. Since you are young, go high risk. You have plenty of time to ride out any dips in the market.

Once you max out what you can contribute to a Roth, look into a whole life policy. It is the only other investment vehicle where your money grows tax free.
View Quote



Agree but look at a universal life/variable universal life policy. You typically can get higher returns in those than the whole life.
Link Posted: 12/12/2013 12:30:52 PM EST
[Last Edit: 12/12/2013 12:31:27 PM EST by Two-dogs]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:


What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized
.
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By evenflow:
Originally Posted By ronnl001:
Originally Posted By evenflow:
I don't plan on doing ANY trading right now at this point my life.

It will strictly be for retirement fund where I will be putting the max I can each month.


Again:

What is your risk tolerance?

What are your goals with this money?

What is your current retirement plan?

You're limited to $5500 per year in a Roth. If you want to do it yourself, you can use something like ScottTrade and manage it however you want. You can also use a traditional broker. I'd recommend a mix of growth right now. I'm a permabear, but this bull train appears to still be running strong and I have only made money betting with it. I like PIMCO total return, and have made quite a bit with it.

At your age, depending on your projected income, I might also look into a whole life policy. You can get something that will work for you for a long time started now, and there are tax advantages to using a policy as an investment vehicle that you can't get elsewhere. A lot of that is income dependent, however, and higher tax brackets benefit more.

Bottom line: I would find a reputable fee-for-services financial planner, schedule a meeting, and talk to them. You will pay a couple of months of those planned contributions, but that is definitely the way to go.


What is your risk tolerance?

0, I want no risk.

What are your goals with this money?

Strictly retirement

What is your current retirement plan?

Nothing

I was under the impresson I could just open up a ROTH and stick 5000 a year in there and just have it sit there until I am ready to retire, then take it out without being penalized
.


No. Think of an IRA as the type of account (like a checking or savings), and basically it allows you to put post tax $$ in (up to the IRS yearly limit) and there are rules about when/how you can withdraw it later in retirement. But YOU have to choose which mutual funds you invest your IRA money in. Depending on your risk tolerance and they number of years until you retire, you will either choose high/medium/low risk mutual funds or a combination of them. Obviously stock mutual funds tend to be more risky than bond mutual funds however with greater risk comes possible greater reward. You have to find the balance for your risk tolerance and time frame till retirement. Once you've determined that, you choose which mutual funds to invest your IRA $$ in each month.

I would suggest using index mutual funds like Vanguards 500 Index fund (which buys shares in the same companies as the S&P 500). By investing in this one index fund within your IRA, you are diversified into 500 companies just by owning that index fund. Index funds tend to have lower fees/expense ratios than actively managed mutual funds too.

If you want Vanguard to shift your money around as you get closer to retirement so you have $$ invested in more bond funds, and you don't want to have to choose which funds (you want Vanguard to decide for you)...there are Lifestatigy funds. Tese funds lessen your portfolio risk as you get older and closer to retirement when you don't want to take as many risks with your money.

Just my .02 cents.
Link Posted: 12/12/2013 12:41:55 PM EST
[Last Edit: 12/12/2013 12:58:31 PM EST by graysonp]
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