Comments on: Starting A Roth IRA With $500 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html personal finance blog with anecdotes, advice and commentary. Sun, 22 Nov 2009 06:04:27 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: confused http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-205874 confused Sun, 30 Dec 2007 21:27:23 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-205874 Help! I want to open a Roth IRA account with Vanguard. I want to start with one for $5,000 for my wife and $5,000 for me. I’m 55 years old and won’t be retiring until I’m 62 or older. I’m not planning on touching the money but you never know if I’ll be needing it for an emergency. I don’t know what kind of IRA I should go for, I really don’t want to loose my money with a risky investment since I don’t have a lot of time to save (I wish I had started a lot younger!). I would appreciate any help from you experts in Roth IRA’s. Thanks a lot! Help!
I want to open a Roth IRA account with Vanguard. I want to start with one for $5,000 for my wife and $5,000 for me. I’m 55 years old
and won’t be retiring until I’m 62 or older. I’m not planning on touching the money but you never know if I’ll be needing it for an emergency. I don’t know what kind of IRA I should go for,
I really don’t want to loose my money with a risky investment since I don’t have a lot of time to save (I wish I had started a lot younger!).
I would appreciate any help from you experts in Roth IRA’s.
Thanks a lot!

]]> By: Ted Valentine http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-138831 Ted Valentine Thu, 02 Aug 2007 20:56:39 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-138831 You DO NOT need a brokerage account to open a Roth IRA. You can go directly to Vanguard.com with $1,000 to open one with STAR. (Suggestion: google Finance Buff Roth IRA STAR). The STAR fund has averaged over 9% annualized the past 10 years. Great choice. You can also go direct to Fidelity or TROWE and open the account online into their no load funds. Otherwise, you're going to pay fees to a broker you don't have to. Unless you're investing more than $10k, an ETF is going to cost you more. You DO NOT need a brokerage account to open a Roth IRA. You can go directly to Vanguard.com with $1,000 to open one with STAR. (Suggestion: google Finance Buff Roth IRA STAR). The STAR fund has averaged over 9% annualized the past 10 years. Great choice.

You can also go direct to Fidelity or TROWE and open the account online into their no load funds.

Otherwise, you’re going to pay fees to a broker you don’t have to. Unless you’re investing more than $10k, an ETF is going to cost you more.

]]> By: Gopal http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-137662 Gopal Mon, 30 Jul 2007 21:23:15 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-137662 Anybody know anything about using Charles Schwab for opening a Roth IRA account? And using their Index Mutual funds as vehicles of investments? Thanks! Anybody know anything about using Charles Schwab for opening a Roth IRA account? And using their Index Mutual funds as vehicles of investments? Thanks!

]]> By: Larry http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136747 Larry Sat, 28 Jul 2007 01:02:00 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136747 Sorry Tanelia, I didn't mean to sound critical, but I'm an Enrolled Agent (licensed by the IRS to represent taxpayers) this stuff is in my blood. I'm wondering if maybe you're confusing a Roth with a Traditional IRA. As a Roth is never actually deductible, it's beauty lies in the tax free earnings and withdrawals (if the conditions are met: age 59 1/2 etc). Contributions to a Traditional IRA are subtracted from your wages to arrive at your adjusted gross income (as though you never earned the money) but are taxed when you withdraw. For purposes of this article, all the brokers, etc. that I've dealt with have the same fees/minimums whether it be Roth or Traditional. Sorry Tanelia, I didn’t mean to sound critical, but I’m an Enrolled Agent (licensed by the IRS to represent taxpayers) this stuff is in my blood. I’m wondering if maybe you’re confusing a Roth with a Traditional IRA. As a Roth is never actually deductible, it’s beauty lies in the tax free earnings and withdrawals (if the conditions are met: age 59 1/2 etc). Contributions to a Traditional IRA are subtracted from your wages to arrive at your adjusted gross income (as though you never earned the money) but are taxed when you withdraw. For purposes of this article, all the brokers, etc. that I’ve dealt with have the same fees/minimums whether it be Roth or Traditional.

]]> By: Tanelia http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136727 Tanelia Fri, 27 Jul 2007 23:10:30 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136727 Larry - I guess I am misused to term credit for deductible. I apologize for that. My point here was that a lot of people open a Roth IRA thinking they will be able to deduct the contributions where they might not be able to (yes, I did that! Although I would have opened it anyway) Larry – I guess I am misused to term credit for deductible. I apologize for that.

My point here was that a lot of people open a Roth IRA thinking they will be able to deduct the contributions where they might not be able to (yes, I did that! Although I would have opened it anyway)

]]> By: Art Dinkin http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136692 Art Dinkin Fri, 27 Jul 2007 20:48:24 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136692 You also may want to check with American funds(www.americanfunds.com). They have no min balance with a $50/mo systematic investment. These are load funds but expenses are fairly low and account fee is $10 (I think). You will want to do your own research. I do not know if they are available except through an investment rep. You also may want to check with American funds(www.americanfunds.com). They have no min balance with a $50/mo systematic investment. These are load funds but expenses are fairly low and account fee is $10 (I think). You will want to do your own research. I do not know if they are available except through an investment rep.

]]> By: Larry http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136619 Larry Fri, 27 Jul 2007 17:04:43 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136619 Those limits you quoted for "deductible" are for the retirement savings contribution CREDIT (reported on form 8880 and deducted on line 51 of your 2006 form 1040). As for "who can contribute" go to www.irs.gov and look up pub 590: "Can You Contribute to a Roth IRA? Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than: $160,000 ($166,000 for 2007) for married filing jointly or qualifying widow(er), $10,000 for married filing separately and you lived with your spouse at any time during the year, and $110,000 ($114,000 for 2007) for single, head of household, or married filing separately and you did not live with your spouse at any time during the year." Those limits you quoted for “deductible” are for the retirement savings contribution CREDIT (reported on form 8880 and deducted on line 51 of your 2006 form 1040). As for “who can contribute” go to http://www.irs.gov and look up pub 590:

“Can You Contribute to a Roth IRA?
Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than:
$160,000 ($166,000 for 2007) for married filing jointly or qualifying widow(er),
$10,000 for married filing separately and you lived with your spouse at any time during the year, and
$110,000 ($114,000 for 2007) for single, head of household, or married filing separately and you did not live with your spouse at any time during the year.”

]]> By: Tanelia http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136603 Tanelia Fri, 27 Jul 2007 15:37:45 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136603 Roth IRA is a must. Mine is through Vanguard, which I had actually opened after you told us to ;) <a href="http://www.bargaineering.com/articles/go-open-a-roth-ira-right-now.html" rel="nofollow"> here</a>. However, I think it's important to point out that contributions are only deductible under certain circumstances: AGI under - $52,000 if your filing status is married filing jointly, - $39,000 if your filing status is head of household, or - $26,000 if your filing status is single, married filing separately, or qualifying widow(er). Check <a href="http://www.irs.gov/publications/p590/ch05.html" rel="nofollow">Retirement Savings Contributions Credit</a> for more info Roth IRA is a must. Mine is through Vanguard, which I had actually opened after you told us to ;) here.

However, I think it’s important to point out that contributions are only deductible under certain circumstances:
AGI under
- $52,000 if your filing status is married filing jointly,
- $39,000 if your filing status is head of household, or
- $26,000 if your filing status is single, married filing separately, or qualifying widow(er).

Check Retirement Savings Contributions Credit for more info

]]> By: Peter http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136587 Peter Fri, 27 Jul 2007 14:57:04 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136587 Firstrade, a brokerage, has a no-annual-fee no-minimum IRA account. It will cost you a $7 commission to buy shares of your chosen ETF. If you are just investing once a year, it may be a good low-fee option until you get the balance built up to the point that you can roll it over elsewhere. The tricky part about investing $500 with them is that you have to buy whole shares of your chosen ETF and so it may be hard to find something that doesn't leave you with too much cash left over. Once you have a position, however, they do perform fractional share dividend reinvestment. Firstrade, a brokerage, has a no-annual-fee no-minimum IRA account. It will cost you a $7 commission to buy shares of your chosen ETF. If you are just investing once a year, it may be a good low-fee option until you get the balance built up to the point that you can roll it over elsewhere.

The tricky part about investing $500 with them is that you have to buy whole shares of your chosen ETF and so it may be hard to find something that doesn’t leave you with too much cash left over. Once you have a position, however, they do perform fractional share dividend reinvestment.

]]> By: jim http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136573 jim Fri, 27 Jul 2007 14:28:38 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136573 No you're not. :) No you’re not. :)

]]> By: Nashawn http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136556 Nashawn Fri, 27 Jul 2007 13:23:07 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136556 Thanks so much for helping me guys. I have decided to check into ING Direct and T Rowe. I still want to do Vanguard, yet at least I know there are other places that are better for me! Oh ...and just for the record...im a girl :) Thanks so much for helping me guys. I have decided to check into ING Direct and T Rowe. I still want to do Vanguard, yet at least I know there are other places that are better for me!

Oh …and just for the record…im a girl :)

]]> By: jim http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136512 jim Fri, 27 Jul 2007 11:17:00 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136512 You're right Joe, before I posted it I fixed the error in the "Wait Until April 15th Next Year" section but missed it in the opener. Thanks! You’re right Joe, before I posted it I fixed the error in the “Wait Until April 15th Next Year” section but missed it in the opener. Thanks!

]]> By: Zachary http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136407 Zachary Fri, 27 Jul 2007 03:33:57 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136407 Everyone who qualifies should have a Roth IRA. I opened mine with Sharebuilder in January 2007 and have been very happy with it since. Everyone who qualifies should have a Roth IRA. I opened mine with Sharebuilder in January 2007 and have been very happy with it since.

]]> By: Joe http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136404 Joe Fri, 27 Jul 2007 03:13:37 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136404 Last time I checked the Star fund minimum at Vanguard is $1,000 not $3,000. Last time I checked the Star fund minimum at Vanguard is $1,000 not $3,000.

]]> By: Larry http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html/comment-page-1#comment-136392 Larry Fri, 27 Jul 2007 02:41:24 +0000 http://www.bargaineering.com/articles/starting-a-roth-ira-with-500.html#comment-136392 ING Direct (the orange ball savings account people) have an initial investment requirement for an IRA account of only $250 per fund. They have about 15 different mutual funds to choose from. However, you may open your account for as little as $25 and $25/month thereafter in an Automatic Investment Plan (“AIP”). An AIP will allow you to invest regular amounts at regular intervals and benefit from Dollar Cost Averaging. There is a $10.00 annual custodial fee. The funds can be deducted from your orange savings account earning 4.5% in the meantime. ING Direct (the orange ball savings account people) have an initial investment requirement for an IRA account of only $250 per fund. They have about 15 different mutual funds to choose from. However, you may open your account for as little as $25 and $25/month thereafter in an Automatic Investment Plan (“AIP”). An AIP will allow you to invest regular amounts at regular intervals and benefit from Dollar Cost Averaging. There is a $10.00 annual custodial fee. The funds can be deducted from your orange savings account earning 4.5% in the meantime.

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