Starting a Roth IRA

[mpweaver4]

I am 25 yrs old and I have just stopped contributing to my employer 401k (they do not match), and would like to open up a Roth IRA account. I was looking into opening one up with Fidelity and there seems to be a minimum initial investment of $2,500 or $200 /month to open one up. Is this typical?
I've done my research and have a basic understanding of how a Roth works, but would appreciate any other tidbits of information I might want to be aware of before I get one started

Thanks!!!!

[cameronr]

Every financial institution is different. Minimum is either 1000 or 500+100/month in an automatic program. The key is starting early and doing your best to contribute the maximum allowable contribution. In 2008 it's 5k and depending on inflation will be 5500 in 2009. Hope that helps.

[kork13]

That is fairly typical--another example, most of Vanguard's funds have a $3000 minimum to open. However, with T Rowe Price you can start for much lower amounts. I don't know them myself, but most recommendations for starting up with low min's get sent toward TRP.

Biggest recommendation I can give would just be to automatically invest a specific dollar amount every month. In general, that will help you deal with the ups and downs of the market.

Originally Posted by cameronr

In 2008 it's 5k and depending on inflation will be 5500 in 2009. Hope that helps.

The numbers came out a few weeks ago... it's still $5000 max into Roth's for 2009. It probably won't go up to $5500 until 2010 or 2011.

[Christophercarl]

I have mine through ING and I really enjoy the ease of transferring money between my savings, checking, and investment accounts at ING.

Whatever works best for you, but I think it's a very smart move to get out of the company's 401k if there is no employer match. They often don't manage funds as well as you could probably do on your own with index funds and lower fees.

[maat55]

Try T. Rowe Price for a lower start up. You can open with a 50.00 a month asset builder.

Mutual Funds - T. Rowe Price

[red92s]

Same age as yourself, and I chose to go with Vanguard due to their low fees and wide variety of funds. Their STAR fund requires only $1,000 as a minimum. I use a savings account until I have $1,000 and make a purchase (about every 3 months). Once I have $3,000 in the STAR fund (about every 9 months), I invest that in another fund and start over again.

[project15]

Originally Posted by red92s

Same age as yourself, and I chose to go with Vanguard due to their low fees and wide variety of funds.

I have mine and my wife's at Vanguard for the same reason. The $3k may be harder for some people to scrounge up, but the low fees are great!

[Investing First Steps]

I think you'll find that fees and investment options will make a bigger long term impact on your happiness that initial opening amounts. I would rather wait until I had enough to open the account and be happy with the service I'd chosen. As a 25 year old you'll probably be having a relationship with them for at least 40 years if you're happy with them, so I'd be picky.

[buzz]

There is also the option of buying ETF's. I am split about 50/50 between Vanguard and Scottrade. I am still on the fence about where to put future investments. There are advantages and disadvantages either way.