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jhhachamp
12-10-2007, 07:08 PM
I want to open a Roth IRA account. I have an ING savings account and they offer Roth IRAs as well. I am wondering if it makes a big difference which bank or website you use to open your account with. I tried to do a little research to find articles on it, but the only articles I can find compare Roth IRAs to traditional IRAs and I already know I want to open a Roth. I'd like to go ahead and open my Roth IRA with ING, but I just want to know if there is anything else I should be considering when deciding where to open my account.

TheShaun
12-10-2007, 07:23 PM
what type of investor are you?
what are your goals?
what is your risk tolerance?
how do you know which securities to invest in?
mutual funds?
stocks?
bonds?
if you're a savy experienced investor then you know the answers to these type of questions. if you have no idea then you need to sit down with a professional.

jhhachamp
12-10-2007, 09:06 PM
what type of investor are you?
what are your goals?
what is your risk tolerance?
how do you know which securities to invest in?
mutual funds?
stocks?
bonds?
if you're a savy experienced investor then you know the answers to these type of questions. if you have no idea then you need to sit down with a professional.

My goals are to open another retirement fund outside of my 401k. I am investing enough to get the 4% contribution, but I feel I can make significantly more by investing additional money in a Roth IRA rather than just adding more to the 401k.

I am ok with a good amount of risk, as I am not planning on touching this money for a long time, but I do not want to have to spend time switching the investments around. My 401k is convenient in this way as there were several pre-assembled portfolios to choose from with varying risk. The portfolios have different percentages of the investment in savings, bonds, large cap stocks, mid cap stocks, small cap stocks, and international stocks. The portfolios automatically adjust the investment to keep the percentages the same and it does not require me to invest much if any time. That said, I chose the pre-assembled portfolio with the most risk and would like to take similar risk in a Roth IRA. I am also aware that my portfolio is not incredibly risky, as I could have custom built a much more risky portfolio, but it has enough risk to allow for significant growth.

I hope this allows others to better answer the questions in my first post.

TheShaun
12-11-2007, 03:14 PM
sounds like you have a good understanding of what you want and you want to handle it on your own. so the ing thing probably isn't a bad way to go. i live in canada so we don't have roth ira's. but they sound like a good compliment to any retirement plan.

raiden031
12-11-2007, 03:33 PM
I bank with ING and so far have been impressed with their checkings, savings, and CD rates and terms. I wasn't too impressed with the Orange Mortgage when I was shopping around for home lenders though. I haven't looked into their IRA stuff, but I would say maybe check a few other places and compare. I know that ING will always be the first place I check out for financial services though.

takl23
12-11-2007, 04:06 PM
Hey Steve,

I used to do this stuff for a living before medicine gave me a call.

A couple things, do you know what a roth ira is? It's an after-tax ira. There are benefits to roths in that earnings in the market are not taxable after a certain age. There are limits as to how much you can put in roth. I've been out of finance for just about a year and I don't know what the new $ amounts are. Also, how old are you? Just because you're investing in high risk because you can handle that stress doesn't always make it the best choice. I've seen 80 year olds with all there monies in high risk international stocks.

You say you're contributing enough to get the 4% employer match, ideally you want to save at least 10% including match. 15% would be better. You should try to save to the limit of your 401k each year. Which I believe this year is $15,500 for your and 44k total.

If you have your heart set on a roth ira, shop around. I will caution you against Ameriprise, but everyone else is ok.

Questions?

Cheers,

Tim

jhhachamp
12-11-2007, 09:20 PM
Hey Steve,

I used to do this stuff for a living before medicine gave me a call.

A couple things, do you know what a roth ira is? It's an after-tax ira. There are benefits to roths in that earnings in the market are not taxable after a certain age. There are limits as to how much you can put in roth. I've been out of finance for just about a year and I don't know what the new $ amounts are. Also, how old are you? Just because you're investing in high risk because you can handle that stress doesn't always make it the best choice. I've seen 80 year olds with all there monies in high risk international stocks.

You say you're contributing enough to get the 4% employer match, ideally you want to save at least 10% including match. 15% would be better. You should try to save to the limit of your 401k each year. Which I believe this year is $15,500 for your and 44k total.

If you have your heart set on a roth ira, shop around. I will caution you against Ameriprise, but everyone else is ok.

Questions?

Cheers,

Tim

I know about how Roth IRAs work and how they can lead to greater savings than regular IRAs. Right now, I contribute 5% plus 4% match to my 401k. I can afford to put more away, but I thought it would be better to put extra money in the Roth instead of contributing more to the 401k. I am not making enough extra money right now to be able to put in the maximum Roth amount, so I just figured I would put as much as I could in there after getting the match for the 401k. Is there any reason I should be putting more in the 401k before opening a Roth?

takl23
12-11-2007, 09:36 PM
The money going to the 401k is pre-tax money so you're avoiding paying taxes on that money, that's the biggest advantage. The idea being when you retire and use that money you'll be in a lower tax bracket and not pay as much to uncle sam as it were.

Think of this, you can put a couple extra % in the 401k pre-tax and your take home isn't reduced quite as much, or take money that you've paid taxes on that's in your bank account and depleat your account.

I should've mentioned this before, but you should have enough saved in a savings account to last you 6 months should you lose your current job. That should come before the roth ira. There can be stiff irs penalties if you take money out of a roth too soon.

If I may ask, who is handling your 401k?

Cheers,

Tim

jhhachamp
12-12-2007, 12:33 PM
I would prefer to the extra money in a Roth before a 401k because I just started work and am not making a whole lot of money, so I will be in a higher tax bracket when I retire through a lot of retirement saving. Therefore it makes more sense to pay the taxes now rather than later.

Since I just started work, I don't have 6 months salary in savings yet, but I would say I could cover expenses for 3 months. I will have that 6 months expenses in savings covered soon.

My 401k is actually a 457 plan of some sort, but it works similarly. I don't remember exactly what it is called, but I have all the info at home. The company handling it is LACERA.

jhhachamp
12-12-2007, 12:44 PM
I found a good article about Roth IRAs that applies to me here: http://www.kiplinger.com/columns/starting/archive/2006/st0309.htm

They say to do exactly what I was thinking of doing in this quote: "How to open a Roth IRA
When you're just getting started investing, the Roth should be your first stop -- even before you open a regular, taxable account, or contribute to a workplace retirement-savings plan. The only exception is if your employer offers a match on your 401(k) contributions. That's free money you don't want to pass up. In that case, contribute enough to win the match, then send any extra money into a Roth IRA. (Yes, you can invest in both a Roth and a workplace retirement plan.)" Also, they say that once you make over a certain amount of income, you cannot contribute anymore, so now is the best time for me to contribute.

jhhachamp
12-12-2007, 01:41 PM
The more I read about it, the more I am thinking about going with Vanguard or Fidelity rather than ING. People seem to like those two a lot. I just don't want to open an account where I have to moniter it a lot and be on top of things, researching investments all the time. I just want to do a little research now and open a simpler Roth IRA, even if it means that I won't get quite as much interest. I want my money to grow, but I don't want to have to worry about it. Do Vanguard and Fidelity offer Roth IRAs with these types of investment strategies?

takl23
12-12-2007, 04:56 PM
I can speak to Fidelity because that's who I used to work for, Fidelity can do it all for you, some of it or none of it. It's up to you. Again, I don't work for them anymore so I have no dog in this fight as they say.

They have great online tools. I know that they spend millions upon millions a year on technology, and the web is certainly one of them.

My advice: Talk to Vanguard and talk to Fidelity. Visit Fidelity.com and Vanguard.com. See what is more comfortable to you.

You're on the right track. Keep saving for that 'emergency' fund and keep the money going into the 457 as we now know that's what it is :) The best thing you can do when speaking with these companies is be honest. I think you'll find (depending on who you talk to of course) that Fidelity will a little more laid back. A lot of Fidelity's jobs are salary not straight commission.

Any other questions?

Cheers,

Tim

backhander
12-16-2007, 10:37 PM
I would prefer to the extra money in a Roth before a 401k because I just started work and am not making a whole lot of money, so I will be in a higher tax bracket when I retire through a lot of retirement saving. Therefore it makes more sense to pay the taxes now rather than later.

Since I just started work, I don't have 6 months salary in savings yet, but I would say I could cover expenses for 3 months. I will have that 6 months expenses in savings covered soon.

My 401k is actually a 457 plan of some sort, but it works similarly. I don't remember exactly what it is called, but I have all the info at home. The company handling it is LACERA.

Hey Steve, so my tip is to definitely contribute to your company 401K enough to the point where you maximize the company match. And if you have extra you want to invest, then I would put it in a Roth IRA. The reason is for a Roth IRA you can choose a place where you can really diversify your investments, as opposed to being confined to the choices of your company. And also, in a ROTH IRA you can withdraw whatever money you put in without penalty, you just can't withdraw any interest you gain.

backhander
12-16-2007, 10:39 PM
The more I read about it, the more I am thinking about going with Vanguard or Fidelity rather than ING. People seem to like those two a lot. I just don't want to open an account where I have to moniter it a lot and be on top of things, researching investments all the time. I just want to do a little research now and open a simpler Roth IRA, even if it means that I won't get quite as much interest. I want my money to grow, but I don't want to have to worry about it. Do Vanguard and Fidelity offer Roth IRAs with these types of investment strategies?

Currently I use TRowPrice, but I'm thinking of switching over to Fidelity or Vanguard as well.....the reason I haven't yet is a lot of Vanguard's Mutual Funds require like a 3K minimum initial investment. So i'm waiting to build to that 3K with TRowePrice first then transfer over to Vanguard.

rorschack
12-17-2007, 03:03 PM
Check out Scottrade. $7 per stock transaction. Many mutual funds do not cost anything to buy. They have local office if you need to see someone in person.

Yes, like someone else said, max 401k to the point of company's match, then put the rest in Roth IRA where you can basically buy any instruments (stocks, bonds, mutual fund,etc) that suits you. Good luck! Lots of informative stuff on the Internet.