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Originally Posted by alleniverson
Open a Roth IRA with T. Rowe Price Retirement 2050 or 2055 (would appreciate it if someone helped me choose there) and deposit $100 monthly.
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You have a great plan! Stick to it and you will be in great shape later in life. The TRP Retirement mutual funds are actually "funds of funds", where you actually own a variety of funds with a single share of the umbrella fund (several other companies also offer similar retirement funds). This gives you an advantage of being automatically diversified with a minimum of complexity. The other advantage to these funds is that they adjust your diversification as you advance towards retirement. When retirement is far off (20+ years) you still want to be diversified, but with a bias towards growth. Growth oriented portions of the fund would include small-cap US stocks and international/emerging market stocks. As you get closer to retirement you need to slowly get more conservative, with more of the fund allocated to fixed income (bonds). You still want some growth but you don't have as much time to recover if the market takes a steep drop. The retirement funds do this automatically for you. A 2050 or 2055 fund would likely be 100% equities (US large cap stocks, small cap stocks, and international stocks). The difference is likely small, although the 2055 fund would stay growth-oriented for a longer period of time, since it assumes retirement is 37 years away versus 32 years away for the 2050 fund. I would suggest the 2055 fund based on your age, as long as you are aware that the fund will be very volatile early on, with a few bad years but more than a few very good years. You have to be willing to keep putting money into it through thick and thin. Good luck and welcome!