Roth IRA

[cookie1wood]

I want to open my first Roth IRA. All this is very new to me and I don't want to be taken advantage of. I am 36 and married I have a pension and a 401k to which I contribute better than the company match at 9%. My wife has a pension and a 403b in which she contributes 1% above the company match at 5% The broker I talked to about opening a Roth IRA was reccommended to me by a family member. I had a meeting with him once before a few months back to determine how I was doing in regards to retirement and i am on track to retire at 65 but if that can be earlier even better. I plan on contributing $50 a month towards my Roth IRA and eventually raise that. Anyways he recommends I invest in these companies which are a branch of American Funds. Europacific Growth Fund, The Growth Fund Of America, SMALL CAP WORLD FUND. He charges a $10 annual fee plus he gets commision on the one he sells. Are these fees reasonable and do you think he is offering good advice and not being swayed by the fact he is commision broker. This particular broker company has been around since 1928 and is a community broker not a large firm such as Charles Schwab. Any advice is appreciated. Thank you.

[disneysteve]

My advice is to turn and run as fast as you can. I would never open a Roth with a commission-based broker. Why should he get a cut of everything? Open your Roth with a low-cost mutual fund company like Vanguard or Fidelity. You will pay no commission. You will pay an annual fee until your account reaches a certain balance and then none after that.

[moneybags]

do you think he is offering good advice and not being swayed by the fact he is commision broker

I think he is totally being swayed by commision.

I second what disneysteve said. Personally, I'm a Vanguard fan.

[atomicrc11]

Fidelity and Vanguard are both great places. I also like T. Rowe Price. They are all good low cost brokerages who won't charge any loads and they have Target Date funds, so if you don't want to be too involved, you don't have to be. Vanguard has a $3000 minimum on their funds except STAR which is $1000. Fidelity is $2500 minimum. T. Rowe Price will let you open an account by automatically investing $50 per month with no opening minimum and Fidelity will do the same for $250/month. If you are getting your company match, you may want to just lower your % contribution to get the maximum match and put the difference into the Roth. I think it is best to put into your 401k up to the match, then put into your Roth until it is maxed out, and then add more to your 401k.

[jIM_Ohio]

T Rowe Price equivalent to the funds recomended:

Growth fund of America=Blue Chip Growth
Small cap stock= Diversified small cap stock or New Horizons
Europacifc fund=International Growth and Income or International fund

**disclaimer ** I own Diversified small cap stock, New Horizons and International Growth and Income. My wife owns Europacific in her 401k.

If you are willing to do research (like posting here and a little more), you can save yourself the 5% commission and $10 account fee.

Vanguard has equivalent funds (Windsor II, Explorer and International Value come to mind).

Fidelity has equivalent funds (too numerous to mention).

You can do better on your own if you are willing to spend time doing some work.

[project15]

I have been using Vanguard for about 3 years now and am very satisfied. It's very easy to set up and you can transfer money in and out online without being charged high brokerage fees. There's no annual fee if you have over $10k in it, but I think they charge a $10 annual fee for under $10k. I have under $10k, but have not seen that fee being taken out, so I'm not sure this is true for all of their funds.

[kv968]

I have been using Vanguard for about 3 years now and am very satisfied. It's very easy to set up and you can transfer money in and out online without being charged high brokerage fees. There's no annual fee if you have over $10k in it, but I think they charge a $10 annual fee for under $10k. I have under $10k, but have not seen that fee being taken out, so I'm not sure this is true for all of their funds.

Vanguard charges a $20 annual account fee for EACH Vanguard fund under $10k. However if you signup for account access on their website and elect to receive statements via email, they will waive that fee.