SEP IRA

Archive for June, 2009

Question: Can you explain the process of opening a Roth IRA in a simple way?

I have no experience in investing at all. I have read a few Personal Finance books and they cover the subject but just explain what it is and not how to pick, open one or what you do with it when you have one. I also went on Fidelity, Vanguard and T Rowe’s website but i find it hard to understand.
I need a step by step explanation of how to pick and open one. Assume that I don’t know anything (which is kinda true). Any recommendations for a Roth book or website that will it explain things is cool too. I do know that I want it to be from a Mutual Fund comapny. I also would like it to be a mutual fund Roth.
My key questions:
1. Are there many types of Roths?
2. How do I know which is the best for me?
3. What do I with it once I have it?

Answer: to keep it simple
1. There is only 1 type of Roth IRA, the are 2 Types of IRA – traditional IRA and Roth IRA
Roth IRA Contribution is AFTER TAX money – when you reach retirement age, you get all the gains tax free.

http://en.wikipedia.org/wiki/Roth_IRA

2. see #1. it make you save money and direct the money to other investments like IRA CDs, Stock, Mutual funds and Bonds.

3. You have to open a ROTH IRA account from a institution. On-line is my preferrence – Etrade, Ameritrade or others…
Read their rule on IRAs because the fees is very important. you don’t want to lose money on fees because you can only contribute $3000 a year into it.

let’s do etrade for example.
goto this page and apply for a Roth IRA account

https://express.etrade.com/e/t/applogic/OLAMasterPage2?current=OLATypeOfIRAGroupDef&ACCT_TYPE_RADIO=for%20retirement&STEP_NUMBER=step1.gif&STEP_TITLE=chooseaccount.gif&IRA_ACCT_TYPE_RADIO=Rollover&SC=NPNM34P

after you have the account number, you can send in your check for upto $3000 every year or wire it(it cost money but faster).

After you have the money credited to your new account, buy stock, mutual fund or just let it sits there until you learn how /what to buy while it earn a little interest. I think below 1% per year. Sell your investment when it goes up and your profit will not be tax until you withdraw before your retirement age.

Self-Directed 401K — Should I Have an LLC Component to MY Plan?

David Botstein speaking at the Genbank 25th Anniversary

Why PGI SelfDirected vs. All the Other Guys