I am a single, home stud, no dependents, and am curious to know whether I should invest in CDs or put money towards 401K, or IRA...I have no clue about these,,.Please Help!!!
2007-02-26 15:02:58 · 6 answers · asked by the_king_of_the_hearts 2 in Business & Finance ➔ Investing
You are talking about two kinds of investments, CDs are for short term, while the 401k and IRA are for long term.
Generally you would want to max out your 401k, especially if your employer provides matching, because this reduces your tax load.
Depending on your income you can then also open a Roth (or a standard IRA if you make big bucks) to supplement that.
You can use CDs to hold cash that you want to keep available in the short term (.5-5 years), but still earning something.
2007-02-26 15:07:31 · answer #1 · answered by partygrl319 3 · 0⤊ 0⤋
Well, if you are employed and your company offers a 401k, start taking advantage of it immediately. Companies take money from your paycheck pre-tax and match that money on a percentage basis and put it into an account for your retirement. Essentially, if you don't use it, you're giving up free money your company wants to give you back on your taxes. If your company doesn't offer a 401k, you should get an IRA or Roth IRA. For these or CDs, I'd check out ingdirect.com. They offer 5.10% for a 12-month CD, which is an excellent rate. They also offer savings accounts with great APY. Enjoy!
2007-02-26 15:07:49 · answer #2 · answered by Beauty Bunny 3 · 0⤊ 0⤋
Both a 401k and a Roth IRA, the 401k limit is 15k a year, and your company matches up to a certain percentage of it (so that's an easy 100% return on the portion they match). Then contribute $4k towards the roth ira this year, in 2008 they will let you contribut $5k towards it per year. All these contributions will be HUGE writeoffs on your taxes.
Say you make $50k and contribute $15k to the 401k and $4k to the roth IRA. Then your real income will be $31k on your tax return.
2007-02-26 15:12:52 · answer #3 · answered by sirtitan45 4 · 0⤊ 0⤋
I would definetely invest money in an IRA. You don't have to worry about rolling money over like you may if you had a 401K. Search around your area for a good investor who can make you some money! :) Good luck!
2007-02-26 15:08:44 · answer #4 · answered by Whitney S 2 · 0⤊ 0⤋
it's you're choice. you need to speak with a financial advisor about it, maybe someone at your bank. it's a personal decision, and should take many things into consideration, such as what you want your money to do for you. there are many other tax deferred vehicles that you can invest your money into such as fixed and variable annuities. really, talk to someone one on one to get the best you can out of your money for you.
2007-02-26 15:10:26 · answer #5 · answered by amiranae 2 · 0⤊ 0⤋
Do you have a house?
2007-02-27 09:33:52 · answer #6 · answered by Anonymous · 0⤊ 1⤋