SEP IRA

Archive for August, 2009

Obama- Treason? Asked Iraq to Stall Troop Withdrawal

Authors@Google: Ramit Sethi

Question: Roth IRA – Mutual Fund Contributions?

I recently setup a Simple Start Roth IRA from Fidelity and have automatic deposits to a Fidelity Freedom Mutual Fund every month. I deposit $200 each month to the fund and would like to continue so until I max it out for the calendar year. For subsequent years, should I begin contributing to another mutual fund within my Roth IRA to diversify my portfolio fund a little or should I continually contribute to that fund. The reason why I’m asking is because the Freedom Fund I currently have is a target retirement fund. I am interested in more aggressive funds that can help maximize my portfolio.

Answer: I started investing 11 months ago and I have 3 funds in my Roth IRA. I invested in Legg Mason Partners (formerly Smith Barney) Aggressive Growth, LMP Fundamental Value, and LMP Appreciation Fund. I only put $50 into Aggressive Growth, $25 into Fundamental and $25 into Appreciation every single month.

LMP Aggressive Growth is probably the best aggressive growth fund out there and is the oldest mutual fund around. There’s not many mutual funds out there that has a 10 year or more history.

Anyway, that’s great that you are investing $200/month. I’m a financial representative and I tell my clients to invest systematically and show them the Dollar Cost Averaging concept. The maximum Contribution to a Roth IRA is $4000 for year 2006-2007 ($5000 if you are age 50 or over). I think it goes up to $5000 in 2008. I assume you are under 50 years old and so, you the maximum Contribution you can make each month right now is: ($4000/12) = $333.33.

Good luck with your future!

Khavari for Governor – Bank of the State of Florida