choosing a Roth IRA

[md0127]

-I'm 25 years old, single
-$72K salary
-$15K in a checking account
-$30K in a Bank of America savings account earning only .10%
-$17K in 401K which I contribute 6% to get the max employer match.
-$14K in 3 student loans w/ fixed interest rates ranging from 5.5-6.5%
-I don't own a credit card so I have no other debt
-I rent an apartment and my car is paid off

I'm planning on opening up a Roth IRA and depositing the max contribution right away. How do you choose who to open a Roth IRA with? And how do you choose which one?

Thanks.

[Jerry91]

You can check out the given article in order to know how and where should you start your Roth IRA account: "http://www.getrichslowly.org/blog/2007/06/07/how-to-start-a-roth-ira-and-where-to-do-it/" .

[feh]

-I'm 25 years old, single
-$72K salary
-$15K in a checking account
-$30K in a Bank of America savings account earning only .10%
-$17K in 401K which I contribute 6% to get the max employer match.
-$14K in 3 student loans w/ fixed interest rates ranging from 5.5-6.5%
-I don't own a credit card so I have no other debt
-I rent an apartment and my car is paid off

I'm planning on opening up a Roth IRA and depositing the max contribution right away. How do you choose who to open a Roth IRA with? And how do you choose which one?

Thanks.

Vanguard is probably the #1 choice, given their low fees. Fidelity is also very good. There are others that are also acceptable. The funds you choose will be much more important than where the account is held.

[BMEPhDinCO]

You have $30k in a regular account so use $14k and get rid of the loans. Then put $5.5k into a target fund at Vanguard for your Roth (try 2050 or 2060 funds - this puts your retirement in your 60s). Then in January, put another $5,500 into your Roth for 2014. That leaves you with $5,000 in your EF plus whatever you save up between now and Jan. 2014.

I would bulk that EF to $10k (OR 3-6mo expenses), then start targeted savings accounts for a house/next apartment move/stuff for household, for auto (ie, next car, registration, maintenance, etc), for medical, and for fun.... other options are travel, gifts, electronics, "special opportunities" (ie, last minute tickets for a concert, a really nice dinner with friends in town only for one night, etc).

You are in a great position - keep that up and you'll be able to retire in good order and live a satisfying monetary life.

[J.Apple902]

Yup I agree with some here. Those student loan interest rates are a little rough, so just pay them off. You have the cash and have a pretty good income (very good) for 25. Open a ROTH, I actually started my Vanguard recently. Do this ASAP bc with your $72k salary, you may not have long to invest in a ROTH (once you make $110k, you can't contribute). Keep whatever you feel comfortable with for an EF - many people use 3 to 6 months living expenses (which will drop for you after you pay off the SLs).

After that, just live below your means. You can save 15% easy peasy, which is what most people would suggest (maybe even 20%). Track your spending, keep saving, live smart, you'll be rich one day. Good luck!

[md0127]

Thanks for the input everybody. I plan on opening a Roth IRA with Vanguard as it sounds like their low fees are a huge advantage. Now choosing the funds...
I don't know much about the stock market so I'm planning on going with an index fund or target 2055 fund. Is there any advantage for one over the other?

Thanks.

[feh]

Thanks for the input everybody. I plan on opening a Roth IRA with Vanguard as it sounds like their low fees are a huge advantage. Now choosing the funds...
I don't know much about the stock market so I'm planning on going with an index fund or target 2055 fund. Is there any advantage for one over the other?

Thanks.

How old are you? Will you be making the max annual contribution?

[md0127]

will be 26 in January. Probably will contribute the max, if not close to it.

[feh]

will be 26 in January. Probably will contribute the max, if not close to it.

Do you have other investments? If yes, please list them.

[md0127]

From my original post (and some additional info), this is what I have:
-$72K salary
-$15K in a checking account
-$30K in a Bank of America savings account earning only .10%
-$17K in 401K which I contribute 6% to get the max employer match. (This is with TRowePrice and is in a target 2055 fund)
-$14K in 3 student loans w/ fixed interest rates ranging from 5.5-6.5%
-I don't own a credit card so I have no other debt
-I rent an apartment and my car is paid off
- also have a Health Savings Account as part of my health insurance with $1,350 in it. my employer adds $150 every quarter.
-my monthly expenses are around $2,400, and profits around $1,300

[feh]

From my original post (and some additional info), this is what I have:
-$72K salary
-$15K in a checking account
-$30K in a Bank of America savings account earning only .10%
-$17K in 401K which I contribute 6% to get the max employer match. (This is with TRowePrice and is in a target 2055 fund)
-$14K in 3 student loans w/ fixed interest rates ranging from 5.5-6.5%
-I don't own a credit card so I have no other debt
-I rent an apartment and my car is paid off
- also have a Health Savings Account as part of my health insurance with $1,350 in it. my employer adds $150 every quarter.
-my monthly expenses are around $2,400, and profits around $1,300

Given you're just starting out, I'd put it in total US market (VTI or VTSMX). Once the balances get larger, you can start looking at international and bond funds.

Check out the portfolio section on this page, if you want to start now:

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit