IRA question?

Question

I have someone who can setup an IRA that will double my money every 6 years. Can I get something better than that?

Answer 1

No, especially if you are saying it's guarenteed. Now you have to see how the IRA is set up. With a standard IRA you will have to pay taxes when you withdrawl the money. If you are paying taxes on money going into a standard IRA, you are better off with a Roth IRA. With a Roth IRA, you will still be paying taxes on money going into the Roth IRA, but you won't be paying taxes on the money being withdrawn. Now a guarenteed rate like that in a Roth IRA will probably be the best investment you can make. In 27 years with $108,000 (of your money spread out over 27 years)at 13% (guarenteed), you will have over $1 million tax free.

Answer 2

Anyone can say that...(I could say I could double your money by next month by putting all your funds into a penny stock) but how is he or she actually going to do it...what's the investment strategy? Investing assumes that you are taking on some risk and that risk needs to be fully analyzed with the expected return and your risk tolerance. Any investment strategy with an expected annual return of 12% is inherently more risky that a diversified equity portfolio so do some more analysis on the strategy and have some other advisors review it for you to determine if it's the right strategy for you. If at any time your advisor even remotely suggested that he can "guarantee" you a 12% annual return you should run away as fast as you can. Don't fall into this trap.....you will regret it.

note: 12% return was obtained by using the rule of 72: take 72/annual rate=# of years to double your money: 72/12=6

Answer 3

Maybe...maybe not.
Certainly not with any guaranteed rate of return.
However, doubling your money in 6 years means you'd earn 12% per year (there are lots of stock mutual funds that have done that, so it is possible, but not guaranteed).