Need advice on opening up a Roth IRA

[JJBoyd1001]

I am 28 and looking to open up a Roth IRA by April 15 for 2007 year and contribute the Max ($4,000 + taxes) and I am leaning towards opening up a Vanguard Target Retirement fund 2045 over Fidelity. Does anyone have any of these companies or any other ones would you recommend? Any advice would be greatly appreciated.

I also have a 457(b) plan through my job in case this might be helpful info.

~~~~~~~ JJBoyd1001

 

[CleverNickname]

That is an amazingly good choice. It would be hard to do better, and very easy to do much much worse.

 

[homer]

Umm, just open it with vanguard if you are going to use vanguard funds. it won't cost you a thing (fidelity may/will charge you to buy a no-load index fund) and with vanguard, you can do dollar-cost-averaging with no overhead. vanguard also has a reasonably priced brokerage in case you decide to swap in some stocks for mutual fund on a later date.

lastly, vanguard is the best mutual fund company out there. they do look out for the best interests of the investors vs. merely lining up their own pockets. and fidelity is the other way around. they are always involved in some form of scams every couple of years. just recently it was reported that many of their money managers (including the legendary peter lynch in the past) took bribes from stock brokers to use them preferentially for trades. SEC prohibits this. fidelity was fined.

 

[judgroybeanbag]

I've been pretty happy with Vanguard. I have part of mine in the 2035 fund, and part in an index fund.

BTW for 2008 you can contribute $5K instead of $4K. Subject to income limitation of course.

 

[Michtex]

Stupid question: I believe in 2010 people will be able to convert traditional IRAs to Roth IRAs. If so, would it be smarter to open up a traditional IRA now and do the conversion then or would it be smarter to open up a Roth IRA now?

 

[pmg]

I have both Vanguard and Fidelity for retirement funds and am pretty happy with both. I think for you youngsters the limit is $5000 this year. Oh, right, 2007.

 

[judgroybeanbag]

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[EuroHorn]

Vanguard would be my suggestion

 

[Gone To Texas]

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[JJBoyd1001]

Thanks everyone for all your advice. I will have to open it up by the weekend to fund for 2007. My co-worker told me about Scottrade because he has it but i will probably do vanguard.

~~~~~~~~~~~ JJBoyd1001

 

[dford28]

I think he is referring to the fact that in 2010 you will be able to roll over your traditional IRA into a Roth IRA even if you exceed the income limits for Roth contributions. I think it is even set up so you can spread the tax payments out over 2 or 3 years.

 

[JJBoyd1001]

DFord28 - That is correct.

 

[SugarLand1313]

I'm 24 and I'm putting aside $200/month even with my modest entry-level salary. I have about $1200 sitting in a savings account right now and want transfer to an IRA ASAP.

I'm by no means an investor, so what do you guys recommend for long term investment that requires very little ongoing attention on my part. Thanks and hook 'em!

 

[Phil Conners]

ttt

 

[homer]

sugar, if it is only 1200, just wait it grows to 3000 and open up a vanguard account (they require a minimum to reduce their cost of management)

once it is there, you can invest in one of their mutual funds (I recommend VFINX or one of the target retirement accounts) to start out. once the account is setup, you can invest the additional $200 a month directly to your IRA account -- a technique called dollar-cost averaging (in case you are unaware) -- for free.

You can also open an IRA account with scottrade with as little as you like. I am not sure if you can start and fund the account by today, however. You can try...if you don't want to lose the opportunity to contribute for 2007.