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joeynap860 | I am 20 years old. i want to open an IRA and i was wondering which kind would be the best for when i retire? |
ie. yielding the most interest with my deposits |
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mook
|
For a person of your age, a Roth IRA would probably be the best choice. This is so because you have many years to contribute to it, and it would be more effective if you contribute continuously (something that's not as easy for older people to do).
Check it out:
http://en.wikipedia.org/wiki/Roth_ira
You can even open one online:
https://us.etrade.com/e/t/welcome/iraroth
:) |
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Rick B
 |
First, you should invest in your company's 401(k) at least up to the match. If your company mathces 50cents on every dollar up to 6% (pretty typical) then you earn an immediate 50% return on the money you invest up to 6% of your salary. You can't beat a 50% return!!
Then, you could invest in a ROTH IRA. The money goes in after taxes, so you lose out on the tax advantage or traditional IRAs, BUT when you take the money out in retirement, it is TAX FREE!
As far as which funds to invest in, It depends on what you have available. You should be diversified with a very high percentage in stocks. These should be divided between small cap, mid cap, and large. You should also have a healthy percentage in international funds. A small portion should be in cash (money market) or bonds. As you age you will tweak this mix to be less aggresive.
The key is to put money in consistently every month! |
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Smilin'Bob_ The Enzyte Guy
|
The best thing you want to open is a ROTH IRA. Its funded with after-tax dollars and all the capital gains are TAX FREE.
You also can withdraw the principle under many circumstances.... |
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Gary
 |
Roth IRA. Check out your local banks. Check out on-line banks. A good place to start is bankrate.com. |
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sasesel1
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I took a finance/math class and learned a lot about IRA's and since your only 20 a Roth IRA is definitely the best one |
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Thin Kaboudit
 |
At age 20, the smartest choice would probably be a Roth IRA. Congress may eventually change the law, but if you already HAVE a Roth, they won't be able to change it. With this option, you won't get any tax write-off up front, but so long as you leave the money in there, you'll get to withdraw it all tax-free when you retire.
As an example of how powerful starting to invest at your age can be, if you invest $1,000 this year (that's $20 a week), and add just a dollar a day after that, you'll be worth a little short of a million by the time you retire.
More realistically, if you invest 10% of everything you ever earn in a Growth Mutual Fund, and we "guesstimate" you'll earn $20K this year and be earning $70K by the time you retire, you will have between $6M and $11M to retire on!
Be VERY aggressive with your investment choices until you are 30-35. Choose Growth or Aggressive Growth funds and some International, too.
Best wishes! |
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Angela S
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An IRA and a ROTH IRA are both like a grocery bag. You put in it any of the following: mutual funds, stocks, bonds, annuities, real estate, etc. As a financial advisor, I suggest you use a ROTH IRA and invest in mutual funds. You can be very aggressive but don't look at it every day/week/month. Remember that it's a LONG TERM investment. At this age of 20, you'll do fine with a 30-50 year horizon. When you get 10-5 years before retirement, you should start moving towards more conservative allocations to hold onto what you've been able to accumulate.
Talk with a professional. It will have the potential to be a very large amount when you start so young. Do it right and you'll be glad when you're still relatively young with a nice nest egg. |
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mister ed
|
first question is how will it effect my taxes---
one is pre tax income reg othe is after tax roth
if you have that problem solve i would put the money in a growth mutual fund!!! |
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NVmeInNYC
 |
Roth IRA. I'm 24 and opened one with TDAmeritrade earlier this year. A Roth is DEFINITELY the best way to go @ our age... research it and you'll see. Also, dont forget to contribute to your company's 401(k) - if you can. If your company matches up to 6%, then put in 6% and get your employers full match. Thats another great way to save for retirement.
:-)
Good luck! |
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fredrick z
 |
Without kn owning anything else, look at a Roth IRA. |
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Etta P
|
In this market, I would certainly consider a roth IRA or mutual funds. Financial advisor can determine the best type of IRA based on when you want to retire and how much you will need to live on (it is only approx. of course) once you retire at 65. I have put 3 website below including the site for the National Association of Prsonal Financial Advisors. The other 2 sites explain what mutual funds and Roth IRA account are and how they work.
Hope they help! |
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Scotti L
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dunno |
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