Need more advice about ROTH IRA account opening?

[savingdealz]

I am 25 years old, living in California. Many people told me that I should open a ROTH IRA account. However, I dont know anything about ROTH IRA. I am sure I will open ROTH IRA (not traditional ROTH). In addition, I am a newbie for ROTH IRA. I have searched many sites, however, I still dont know what companies do I need to open. Like Vanguard and Fidelity, Charles Schwab, scottrade, t rowe price, American Funds

Because I am very new to Roth IRA, so I like account that I can practice. I dont like any fees, I dont like any requirements that need to put a lot of money in it every month. In other words, I can decide how much I want to put. Right now, I am still in college, I earn about 600$ a month with a part time job. That is the reason I dont want to put more money in roth IRA.

Anybody helps me about this information please?
Thank you so much!

[fruitbowlk]

This is infor from Suze Orman.

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Where to Open a Roth IRA Account

Alrighty, you're sold on what a great investment a Roth IRA is, but now you're stuck on how to open a Roth account.

Relax. It's a snap.

Remember, as I explain in the book ( see p. 192) a Roth is simply a type of account. You open a Roth IRA account at a discount brokerage or a no load mutual fund company. Notice I said discount brokerage and no-load fund company. Saving on the cost of investing is one of the most effective ways of making money. So I don't want you using a full-service brokerage, or paying a sales load on a mutual fund.

When you set up a Roth IRA account you must choose a specific investment for that Roth. It can be any combination of stocks, or funds. My advice is to keep it simple and simply opt for a no load index fund. With an index fund you get a broad investment in hundreds, if not thousands, of stocks. That's a great one-stop way to get stock diversification. Or you can use an Exchange Traded Fund, which works just like an index fund but offers you a bit more flexibility. Just remember that you don't want to be making too many periodic investments with an ETF because you will need to pay a brokerage commission with each purchase. (No load funds don't charge a commission.) For more info on funds and ETFs, click here.


You can call up any discount brokerage or no load mutual fund company-or head to their website)-and get the application to open a Roth IRA. Below is contact info.

The one catch here is that there are typically initial minimums you must fork over to open an account. The good news is that brokerages and fund companies lower those minimums for IRA accounts, so they can be as little as $500-$1,000, or so. But also check if you will get dinged for any annual account maintenance fees.



Now if you don't have $1,000 ready to invest, don't give up. Ask the brokerage or fund company if you can qualify for an even lower initial minimum investment if you agree to make ongoing investments, rather than one lump-sum investment. For example, at the T. Rowe Price no-load fund company, the typical Roth IRA minimum is $1,000. But if you sign up for the Systematic Purchase account, where you agree to make an investment every month your minimum drops to just $50. That's YF&B friendly if you ask me.

NO LOAD MUTUAL FUND COMPANIES



NO LOAD FUND COMPANY TELEPHONE
Fidelity 800-343-3548
T. Rowe Price 800-225-5132
Vanguard 877-662-7447
DISCOUNT BROKERAGE TELEPHONE
Ameritrade 800-343-3548
Sharebuilder 866-747-2537
Muriel Siebert 800-872-0711

[jIM_Ohio]

I would open a Roth IRA. If you do not like frequent investments ($50 once per month) your choices might be more limited.

T Rowe Price waives account minimums if you contribute $50/month (as automated withdraw). This requirement persists until account has $5000. If you do not contribute $50/month, you are required to invest a minimum of $1000 the first time you invest, with minimum additional deposits of $100.

The minimums at Vanguard will be higher, I believe.

clarification- you want to open an IRA which is a Roth IRA. There is also a deductable traditional IRA which you alluded to in post but used the wrong terminology.

[LuxLiving]

savingdealz,

ingdirect.com has a way to start a Roth IRA - this is what I used to start my boys out with while they were yet teens and IF I remember correctly there were no minimums that had to be automated (this may have changed since they had their's there). Once they had a good little amount in there we transfered to Fidelity.

ING DIRECT Orange Retirement Accounts - IRAs - Investing Basics

[FrugalIII]

I opened my Roth IRA accounts a few years ago with T.Rowe Price. They have an automatic asset builder plan where you can contribute as little as $50.00 a month or at a time and no minimum to open the account. Works great and they are very nice folks. I do mine online though. Opened the account online, invest online etc. They have quite a few options available, all on their website. Check it out. You might find it useful.

[Skooby]

I opened my Roth IRA accounts a few years ago with T.Rowe Price. They have an automatic asset builder plan where you can contribute as little as $50.00 a month or at a time and no minimum to open the account. Works great and they are very nice folks. I do mine online though. Opened the account online, invest online etc. They have quite a few options available, all on their website. Check it out. You might find it useful.

All of this is true! I opened my Roth with T.Rowe Price in February and I've had no problems.

[savingdealz]

I am gonna open roth IRA in T Rowe price, but I dont know which one should I choose when I see in this in T Rowe Price?

Which types of investments do you want to hold in your T. Rowe Price IRA?
I would like to invest only in T. Rowe Price 100% no-load mutual funds.
I would like to invest in T. Rowe Price mutual funds, mutual funds from other companies, and individual securities such as stocks and bonds.

What is the difference between them?

[jIM_Ohio]

I am gonna open roth IRA in T Rowe price, but I dont know which one should I choose when I see in this in T Rowe Price?


What is the difference between them?

There are 3 types of investments

1) stocks- ownership in a company
2) bonds- company borrows money and pays back loan with interest
3) commodities- tangilble supplies used to produce something. Real estate is an example, as is gold, silver and corn.

Mutual funds will pool money together from people like me and you and then invest in one or more of the investment types above.

There are many types of stocks (large companies, small companies, US companies, foreign companies), different types of bonds (government debt, corporate debt, foreign debt, real estate debt) and different types of commodities.

You need to decide how much of each of the types you want- this determines how much risk you are willing to take. For example would you want 100% of your retirement to be in the price of gold and corn? Probably not- too much risk, not enough historical return.

Most people decide on a mix of stocks and bonds

100% stocks and 0% bonds would be highest risk/ highest return, Between 8-12% returns over time. Could see years like -20% or years as high as +20%.

80% stocks and 20% bonds is moderate risk/reward. 7-10% returns over time. -15% to +15% returns are what I would expect.

60% stocks and 40% bonds is balanced risk/reward. 6-8% returns over time. -5% to +8% returns are what I would expect.

40% stocks and 60% bonds is income generation. Probably can return 4-5% consistently without losing much money, but the probability of returns above 6% over time is minimal.

Then choose a mutual fund, or group of mutual funds which create the mid needed.

For me-
I am age 35 and aggressive in my investing.
97% equity and 3% bonds
42% T Rowe Equity Income PRFDX
15% T Rowe Mid Cap Growth and Diversified Mid Cap Growth (RPMGX and PRDMX)
15% T Rowe New Horizons, Diversified Small Cap Growth and Small Cap Value (PRNHX, PRDSX and TRSVX)
15% T Rowe International Growth and Income (TRIGX)
10% T Rowe International Discovery (PRDSX)
3% bonds in T Rowe Spectrum Income (PRSIX)

For a newbie, I would suggest looking at either a target date fund, spectrum growth and or spectrum income to start at T Rowe Price.

[savingdealz]

hi jIM_Ohio,
I like your information. However, I think you misunderstood my question.

Which types of investments do you want to hold in your T. Rowe Price IRA?
I would like to invest only in T. Rowe Price 100% no-load mutual funds.
I would like to invest in T. Rowe Price mutual funds, mutual funds from other companies, and individual securities such as stocks and bonds.

THEY ARE LINKS TO OPEN MY ROTH IRA (retirement investment). When I click the first link (I would like to invest only in T. Rowe Price 100% no-load mutual funds.) then I click Open your IRA online, then I see OPEN AN ACCOUNT with these options :
What Do You Want To Do Today?
Select one below:

Open A Mutual Fund Account (including IRAs) Online
Transfer an IRA Online
Roll Over a 401(k) Online

On the other hand, I click the second link (I would like to invest in T. Rowe Price mutual funds, mutual funds from other companies, and individual securities such as stocks and bonds.),
I see this Open a T. Rowe Price Brokerage Account Now

So Which link should I open? I am a student, work part time, and I can contribute 50$- 100$ a month.

Thanks!

[noppenbd]

I don't know about T Rowe, but with Vanguard, if you only invest in their mutual funds the fees are a bit lower. If you want a full brokerage account you will pay commissions on stock trades, possibly loads on mutual fund trades, and annual account fees.

You probably want the first option, it will be simpler if you are just looking for TRP funds anyway.

[jIM_Ohio]

You don't want a brokerage.
You want to open a mutual fund account with TRP.

Open A Mutual Fund Account (including IRAs) Online

[savingdealz]

Would you tell me what is brokerage? What is the difference between the first link and the second link?

By the way, I see a lot fund in the first link. They are:

Africca & Middle East Fund
Balanced
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Corporate Income
Dividend Growth
Emerging Europe & Mediterranean
Emerging Markets Bond
Emerging Markets Stock
Equity Income
Equity Index 500
European Stock
Extended Equity Market Index
Financial Services
Global Stock
Global Technology Fund
GNMA
Growth And Income
Growth Stock
Health Sciences
High Yield
Inflation-Protected Bond
International BOnd
International Discovery
International Equity Index
Internation Growth & Income
International Stock
Japan
Latin America
Media & Telecommunications
New America Growth
New Asia
New Era
New Horizons
New Income
Overseas Stock Fund
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Prime Reserve
Real Estate
Retirement 2005 Fund
Retirement 2010 Fund
Retirement 2015 Fund
Retirement 2020 Fund
Retirement 2025 Fund
Retirement 2030 Fund
Retirement 2035 Fund
Retirement 2040 Fund
Retirement 2045 Fund
Retirement 2050 Fund
Retirement 2065 Fund
Retirement Income
Science And Technology
Short-term Bond
Small-Cap Value
Spectrum Growth
Spectrum Income
Spectrum Interational
Tax-Efficient Balanced
Tax-Efficient Growth
Tax-Efficient Multi-Cap Growth Fund
Total Equity Market Index
U.S. BOnd Index
U.S Trasury Intermediate
U.S. Treasury Long-Term
U.S. Treasury Money
Value

I have no idea what they are (absolutely no idea) ? How can I choose which one?

[jIM_Ohio]

You should do some research before choosing- or read my previous posts for what I own- or check my blog which lists what I own as well.

Before doing this you need to research and understand the risks each fund will take. Some of my funds lost 20% this year (so far)- if you think this is bad, then do not follow my advice or look somewhere to learn more. There should be links on the TRP web site for how to choose an investment- but that link requires you spend some time to understand various risks with investing.

[savingdealz]

Would you tell me where can I research those fund ?
Is there any site that helps investors choose fund?

[jIM_Ohio]

The T Rowe Price web site will help you research funds.

There is a fund research link (I think).

Here are the steps you need to take (in order)

1) decide to invest for your retirement
2) choose how much you can afford per month and per year.
3) Determine how much risk you want to take.
This is usually expressed in terms of %stocks and % bonds
100% stocks is aggressive
80% stocks 20% bonds is moderately aggressive
60% stocks and 40% bonds is moderate balanced
40% stocks and 80% bonds is moderately conservative with moderate income
anything less than 20% stocks is conservative and probably geared towards significant income needed.

Most financial sites (like T Rowe Price) will have links to help you determine this.
T. Rowe Price - Personal Guides

I think the above link is what you need from T Rowe Price.