Taurus
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Joined: 27 Apr 2005
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| where to invest roth ira |
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Just wondering what to invest my roth IRA into. I will start this year with a roth ira and I will only be able to invest in it for four years unless they raise the maximum salary that allows one to invest into a Roth IRA. Do you think that TIPS is a good investment to put the roth IRA into. I am currently 25. Where I will be working for my residency, I don't think the hospital offers a matching funds for retirement investing. For my extra cash that I need to keep liquid, I've been using the ING direct orange account. Wondering if there is something better besides Emigrent which people have told me is a pain.
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Fri Jun 17, 2005 12:31 am |
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jlee1224
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Location: Baltimore
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ROTH IRA's biggest perk is you don't pay a dime in taxes when you get the money out (in retirement). What the balance says is what you get. Since you are young and have 30-40 years of growth to come, anything you put in the account will grow tax free. There's two ways to strategize:
1) Put stocks in the ROTH IRA (or stock fund, mutual fund). Stocks historically over any large sample and time do better than bonds, around 9-13% a year, depending on which magazine, website, or tv personality you ask. With this much potential growth, you should put stocks in a ROTH IRA to get all that growth tax free in retirement.
2) Stocks get such good tax treatment (as of now, 15% long term cap gains, may change once you get to retirement), that you want your stocks in taxable accounts. You should put bonds in your Roth IRA to maximize tax consequences in retirement.
Now, I will say that the fact that you are putting money in at such a young age, you are way ahead of most people. And going to be a doctor, I see only good things. I myself would go with option 1, since you don't know what the tax rates are going to be in the future.
I am sure that the hospital will have some sort of match in retirement investing, but your salary while a resident will be low, so you may not be able to save that much.
I like ING orange account. There are a couple of better sites with slightly better rates, but I personally have been with ING for a while, and I like the ease.
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Tue Jun 21, 2005 1:59 pm |
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Taurus
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Actually, my hospital does not match. They only do so for the attending physicians.
I guess my question is what are the best of stocks or mutual funds to invest in?
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Sun Jun 26, 2005 12:00 am |
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MattL
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I would go with a no load index mutual fund. Check out www.vanguard.com they have the best.
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Sun Jun 26, 2005 7:11 pm |
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Taurus
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Do you consider that fund a low risk. I just want to make sure the roth grows at a point where it is beating inflation.
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Mon Jun 27, 2005 6:47 pm |
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pandashark
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I had been putting my Roth IRA in various Mutual funds with T Rowe Price...but this year, I opened an account with Legg Mason, putting my IRA into the Value Trust. It's done fairly well in recent history, beating the S&P for 14 years or something like that. I am young also, so I can just leave the money there for the present, and let it grow (hopefully) over the next few decades.
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Tue Jun 28, 2005 11:11 pm |
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MattL
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quote:
Originally posted by Taurus
Do you consider that fund a low risk. I just want to make sure the roth grows at a point where it is beating inflation.
An index fund will do as well as the market. Yes, I consider it low risk. You have to decide for yourself if you do based on your risk tolerence.
One of the things I like about Vanguard's index funds is the low cost of ownership. They are no load, meaning there is no comission. The expense ratio is also the lowest in the industry. These are two things that can reduce your return, which to me is risky.
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Wed Jun 29, 2005 2:39 am |
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