Are Roth IRA's the best way to go?

Question

I have 10K to invest, I was going to buys Roth IRAs for myself and my wife up to the cap this year, and put any remainder into another next year. I am only 40, but would prefer not to take much risk since in this economy just holding onto your job is stressful enough.

Answer 1

Yes. In most cases, the Roth IRA is the best way to go. It's after tax funds that you put into an account now and it gets to grow tax free. I'd probably put the conservative $$ in a different account and let the ball roll more on this one, only because if you get higher compounding on this money, you get to keep it all.

Keep in mind that a ROTH IRA does not have to be in mutual funds, nor does it have to be on bonds or any cr*p like that.

If you are comfortable buying stocks or ETFs, you can do almost any type of trades in your ROTH IRA as long as you know what you're doing. :-) Many brokers don't always tell you this and if your broker doesn't understand this, then it's time to get a new broker. Too many damn stupid brokers out there that just want to leech off of people's money. (sorry about t-ing off, but too many people are just not educated enough to fight back or to even know to)

Hope that helps!

Answer 2

Do it. A Roth is great for AFTER TAX investment. You're young enough to put it into something with a little risk and 'beat' the market. Remember though, you can't take Roth $$ out until you're 59 1/2 (don't ask why the 1/2, makes no sense to me either)

Find a broker and do it. Every little bit of cushion you can get, is a good thing.

Answer 3

Good for you that you have saved the 10K!!! yes a Roth is a great idea and you have all kinds of options for investment. Within the Roth you can invest in CDs or an annuity as a really safe option. Now the rates are pretty good.

Answer 4

Nothing is a sure thing but a Roth is a good investment, especially if there is a chance you may need the cash before retirement.

There's more to it, but essentially you are betting on the taxes now being less than in the future if your other choice were a traditional IRA.

Answer 5

Roths are good because you don't have to pay income taxes later... But, you do have to decide how to invest your money once it's in the account, i.e. stocks, mutual funds etc. Another alternative would be an Equity Index Annuity. You can usually get a 5-10% sign on bonus and earn up to 33% with out the chance of loosing your principal.

Answer 6

Because of the ways the taxes work, you are approaching the age where a ROTH is less desireable than a traditional IRA. You can invest it in whatever you like under the umbrella of an IRA to minimize risk. (stocks, mutual funds, money market)