Long term savings: I am interested in starting a long term savings plan such as a?

Question

traditional IRA, or maybe a Roth. How do I go about doing this? Should I deal with somebody locally, or should I do it over the internet? What is the minimum amount of $ that I need to start one? Do you reccommend something different for long term rather than IRA or Roth?

thank you

Answer 1

As long as you are out of debt it's a great idea to start saving. I would start with 3-6 months of expenses in a money market account or savings account just to have as an emergency.

Once you're set there, then start saving for retirement. If your company has a 401K, start there. Many times your company gives you a match. The rule of thumb I've heard is 15% of your gross income should go towards retirement.

Start that with a 401K, then max out the Roth IRA each year. If that doesn't meet your 15%, then finish out by putting the difference into the 401K.

Answer 2

Definitely start saving right away. You'd be amazed at the difference waiting just a couple of years to save can make to the end totals. Whether or not you contribute to a Roth or Trad IRA depends on a lot of different factors. The difference between the two plans is that a Roth IRA is funded with after-tax money and the gains are tax deferred until retirement. You can pull out your contributions without paying taxes or a penalty, should you need them, because the money has already been taxed. Deposits to a RTH are not tax deductible because you've already paid taxes on them. A traditional IRA can be deducted from your taxes and
the gains grow tax-deferred until retirement, but you can't pull your money out before retirement without paying taxes and a 10pct penalty on it. But you can only fund a Roth account if you make less that a certain amount of money per year. If you have a company 401k, especially one that matches funds, the 401k will be your best bet to start saving - if the 401k provider has any decent funds for you to invest in. You can research performance
at yahoo finance. The time and effort is worth it.

Answer 3

Start a ROTH immediately and do it with someone from your area. It is easier having someone local so you can stop in ans ask question any old time you feel like it.

If you prefer the Internet then check out "scott trade".

Minimums will vary place to place but the average amount to start on will be around $500.oo.

An IRA is simply a bucket so to speak. What you put in that bucket is up to you. I would get a mutual fund in technology stocks within that Roth IRA. Be sure to fill that bucket up for retirement. It is never to early to start. Get your friends and family saving too.

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