Roth IRA help needed

[SnoopyCool]

DH has a Roth, of which he or I understand very little. He'd like to start building this account, but he needs some more knowledge.

Preliminary info: DH's employer does not offer any type of retirement. He makes about $45k/year. I work really hard for free at home.

Here's what we'd like some help with.

1. Is it customary to pay a maintenance fee every year ($35 to CUNA Brokerage Services)?
1a. If not customary, how do we get this transferred into someplace better, i.e., out of CUNA's hands and into someplace like Vanguard, etc.)?

2. The account is 100% invested in Mutual Funds. Specifically, in AIM Technology Fund Class A (ITYAX). How do we get it into something else? The value is 1/10th of the $ DH originally invested (he hasn't done anything with it in 10 years... in fact, the only thing ever invested was the original amount of money invested to open it).

3. DH is 39. Shouldn't he have more diversity than just 100% mutual funds? He's not a risk taker.

4. I'd also like to start a Roth. How can I do that?

5. Once started, can we just deposit $ into it online?

In advance, thanks for sharing your wisdom.

[sweeps]

Vanguard makes it very easy to roll over your IRA to them. You can call them or visit their web site for instructions. You can avoid a fee at Vanguard by getting your statements online. However, there is a minimum investment -- generally you'll need at least a $3,000 balance.

Mutual fund is a very general term. There are all kinds, ranging from very low fees to very high fees, and from very specific investments to very broad investments. Putting all your money in technology is NOT a good thing. There are many funds (including Vanguard Total Stock Market Index fund) that are much more diversified.

Yes, you can start a spousal Roth IRA as well -- even if you have no income. You can either write a check to Vanguard, but usually you would just authorize a transfer from your checking account to start your account.

[asmom]

Hi SnoopyC, there are some very sophisticated investors here who will be sure to come along to give you some great advice but let me tell you what I understand about Roths.

First of all, yes you too can open a Roth. You and hubby need to choose the company you want to go with and then you can go from there. I use T.Rowe Price, it is very simple to open with them and if you don't have a large amount to invest upfront you can set it up with monthly deposits of as little as $50 per month.

Additionally they have a large selection of funds for you to choose from; you can read about the funds, look at historical performance and current performance.

$35 a year maintenance fee seems like a lot to me. I pay $10 with TRP and it's my understanding that is more than other companies like Vanguard.

Once you choose a company, it's pretty easy to transfer your remaining funds to your new IRA, there is a link on their websites which tell you what to do to make the transfer and how to do it.

Good luck, as I said I'm sure others will be along to give you more advice and resources.

[jIM_Ohio]

Preliminary info: DH's employer does not offer any type of retirement. He makes about $45k/year. I work really hard for free at home.

Here's what we'd like some help with.

1. Is it customary to pay a maintenance fee every year ($35 to CUNA Brokerage Services)?

I was charged $10 pr mutual fund at T Rowe Price until the mutual fund had $5000 in it. Took me 2 years to get fees waived (now yearly max is $5000, so maybe fees for one year in your case?).

1a. If not customary, how do we get this transferred into someplace better, i.e., out of CUNA's hands and into someplace like Vanguard, etc.)?

Contact your vendor of choice (T Rowe Price, Vanguard, Fidelity, and they will tell you what form to fill out.

2. The account is 100% invested in Mutual Funds. Specifically, in AIM Technology Fund Class A (ITYAX). How do we get it into something else? The value is 1/10th of the $ DH originally invested (he hasn't done anything with it in 10 years... in fact, the only thing ever invested was the original amount of money invested to open it).

The last 10 years have not been good for tech- as this fund shows. You want to learn about asset allocation. That is not a fund for someone which is risk averse (based on its name).

3. DH is 39. Shouldn't he have more diversity than just 100% mutual funds? He's not a risk taker.

question doesn't make sense. Mutual funds own 200 stocks- some may own more, some may own less, but the ones I own have around 200 stocks in them. I would consider that diversified. I also own 10 mutual funds which gives me even more diversity. You need about 5 funds to be diversified well (large cap domestic, mid cap domestic, small cap domestic, large cap foreign, small cap foreign, diversified bonds).

4. I'd also like to start a Roth. How can I do that?

when you call to roll the roth to a new custodian, ask about how to open a new account too.

5. Once started, can we just deposit $ into it online?

YES. T Rowe Price waives minimums if you use asset builder, which says $50/month is transferred into account. Maintaince fees ($10/year) will be charged on balanced less than $5000.

In advance, thanks for sharing your wisdom.

[SnoopyCool]

Thank you for the feedback everyone. Investing is something I know almost nothing about, other than knowing we need to get on the ball!

Thanks again for your help. We'll be rolling that IRA soon, as well as starting one for me.