I'm twenty years old and am currently interested in knowledge about IRA's

[Anonymous]

I like to plan ahead in my life, but I'm having some trouble finding some information about IRA programs. I have some questions.

I currently don't make much money, would opening an IRA now and making a very minimal annual contribution benefit me at all or even potentially hurt me somehow? I'm also thinking about a Roth IRA.

Who would you or do you use for your IRA program, I've been looking at NAVYFCU and they look excellent from what I can see.

If you have any information you feel I should know please post.

[compassion101]

For every $100 you put into retirement today, you should have around a $3k at 70 years old, which should be around retirement age at that point. I'd out away what you can. I use TDAmeritrade for a roth IRA. I'd go with the roth for you since you don't make much and probably have little or no tax liability so the benefits of a traditional IRA wouldn't apply to you.

[tacpoly]

Go for the Roth IRA for a couple of reasons.  Because you "don't make much", your tax rate is low.  This means the tax deferred benefits of a traditional IRA will be minimal for you.  With the Roth IRA you pay taxes now (low tax rate) but withdraw money tax free starting at 59.5 years old when presumably you'll be at a higher tax bracket. 

Read If You Can - How Millenials Can Get Rich Slowly by William Bernstein.  He gives it out for free (http://www.etf.com/docs/IfYouCan.pdf) or you can download it on your Kindle for $0.99.  It's short - it will take less than an hour to read - and well worth it.  It's exactly for people like you:  young, just starting out, and want to save for their future. 

[HiLine]

Do make the money grows, you have to invest it. Just contributing to your IRA is not growing money. An IRA is simply an investment account that has tax advantages. If you don't invest anyway, contributing to an IRA is meaningless. But if you do invest, there is no better type of investment account than IRA. At your income level, definitely Roth IRA as opposed to Traditional IRA.

[Anonymous]

if i open an IRA will that give me more tax returns? 

[Lyythine]

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@Anonymous wrote:

if i open an IRA will that give me more tax returns? 

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Do you mean tax deductions?  If so, perhaps.  A traditional IRA allows for a tax deduction on your annual return.  Roth IRA's are funded using post-tax dollars, therefore, are not tax deductable.

[Anonymous]

Definitely! Put away whatever you are able to, the power of compounding is on your side. As others have said I would highly recommend you go with a Roth IRA since your tax liability is much less now than what it will be in retirement. If in the future you are in need of your contributions (assuming account is seasoned) you can withdrawal them without a penalty since taxes have already been paid. I personally use Sharebuilder by Capital One, another discount online brokerage. There is no fee to have an IRA and trade costs are low, and there are some no fee mutual funds as well. If you opt for a mutual fund over an ETF be sure to look at expense ratios.

Also, if you're work offers a 401k match take advantage of it.