How/Where to Start Roth IRA

[lmb5109]

I really should of read the 100's of posts on IRA's in the past but didn't. We want to start one soon so we an budget it in before LO gets here. I know we can't do the max per year but hopefully build up to the max in the next few years.

Where is the best place to put our $? Our bank or online? It comes out of our checking account each month correct?

[Deleted]

Definitely not at your bank.

Do you have 401(k)s? If so, and they're at one of the large, good brokerage firms like Fidelity or Vanguard, you may want to open your IRA there for convenience (I like seeing all my accounts in one place, provided that I'm happy with that place).

But otherwise, somewhere like Fidelity or Vanguard

I have my IRA contribution taken out of my checking account each month, but that isn't the only way to fund it.

[lanyac]

We have ours through fidelity. The money from it comes from wherever you want it to.

[Awkward]

Just another vote for Vanguard. It took me less than half an hour to set up and get the automatic deposits set up. Definitely don't go through your bank, they usually have VERY limited investment options.

[SJ]

I think Fidelity and Vanguard are two really solid options!

Personally, we use Sharebuilder because it is linked to ING and I like their portal.

Any of these firms will be happy to walk you through how to open the accounts. They also all have pretty good, easy-to-follow websites. Once you open the Roth IRA's (I'd open one for each of you), then you can choose how to fund them, up to $5,000/year each. You can have the funds pulled out of your checking accounts periodically (or all at once), you can mail in a check, transfer funds, etc.

Great job!

[Deleted]

I use Vanguard.

[SJ]

Also, as far as investment options go, when you are just starting out and have a small account, I'd just throw it in a target date fund.

[hamster]

Oct 3, 2012 10:27:19 GMT -5 @peggyolson said:

Ours are through T Rowe Price because they had a very low minimum investment amount.

This is why we chose T Rowe Price also. I've been happy so far.

[agnes]

Oct 3, 2012 10:37:14 GMT -5 SJ said:

Also, as far as investment options go, when you are just starting out and have a small account, I'd just throw it in a target date fund.

Thank you for saying this. I have been wondering if that was a good idea starting out.

[kaylie]

We have ours through WellsFargo. We have a PMA account where if you keep a certain minimum there are no fees for anything. The roth is self-managed like a regular brokerage account and we get 100 free trades per year, per account. I don't think there's a minimum for the individual account specifically.

The minimum for the PMA account was $25K when we signed up (I assume it still is) and you can count 10% of your mortgage balance towards it if they service the mortgage. Our savings and checking are also through that account and count towards the total required.

Another thing to look into is whether or not your company offers a Roth 401K. I don't know how popular they are, but H has one through his company.

[lmb5109]

Thanks everyone! Sara, great advice as always!!

We have Wells Fargo & T. Rowe Price for our 401k's. DH is putting about 14% and I am putting about 13%, we want to have these to about 16-17% by next March when we get our raises. We've been happy with WF & TRP so far. As long as I see the accounts on mint.com, I don't care where they are.

I read something about combined income and how much you can contribute, we are over $100k but under $150k, so we wouldn't fall into that category right? We can each do $5k a year?

[SJ]

Roth IRA Eligibility starts to phase out when your MAGI (modified adjusted gross income) hits $173K for MFJ. If your MAGI is over $183K MFJ you may not contribute for that year.

So you should be safe to contribute $5K each per year!

ETA to clarify that "MFJ" means Married Filing Jointly

[thatgirl2478]

my DH has one at Fidelity and I have one at Vanguard.

The only reason we have them in different locations is because DH had old 401k money at Fidelity already and I didn't.

Both are great.