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Contributor

Re: IRA

Thank you all for all the advice. I've opened a Roth IRA with Vanguard since they were the one that seemed to be most recommended. My brother-in-law is going to help me a bit as I found out he's really knowledgeable about these things. I'm thinking of emptying one of my rainy day savings into the fund then just split up the amount I normally put in savings.

 

 

Also, I'm a she...at least I was the last time I checked.Smiley WinkSmiley Very Happy

Current Information (05/2016)
Scores: EX: 633, EQ: 619, and TU: 727
Current Utilization: ?%

Goal: All above 750 and no more than 3% utilization
Gardening until 12/31/16 (Hopefully)
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Message 11 of 20
Super Contributor

Re: IRA


PinkPanther3719 wrote:

Thank you all for all the advice. I've opened a Roth IRA with Vanguard since they were the one that seemed to be most recommended. My brother-in-law is going to help me a bit as I found out he's really knowledgeable about these things. I'm thinking of emptying one of my rainy day savings into the fund then just split up the amount I normally put in savings.

 

 

Also, I'm a she...at least I was the last time I checked.Smiley WinkSmiley Very Happy


the one thing i would note is you should always have an emergency fund in an saving account or something that you could get to in a pinch. I wouldn't call IRA that liquid of an account. Just in case something happens if you lose your job or some kind of medical emergency or something like that. 

 

Vanguard is an good choice with roth , i have one with them as well :-)



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Message 12 of 20
Super Contributor

Re: IRA


tacpoly wrote:

Jesus people.  The kid said he's a total novice about investment choices so why throw "TR fund", "SPY", "ETF", "RMD" into your posts.  If you're going so far as to give advice, at least make it somewhat clear for a newbie.


You're right, point taken!  Have just gotten so used to using acronyms, both in RL and on this forum, that I forget there are many who aren't as well versed in them. 

 

OP, Vanguard is as a good of a choice as any.  Just make sure you open it as a Roth IRA, tax free is much better than tax deferred, and do the converstion this year.  You're off to a great start!

 

Good luck!

Message 13 of 20
Frequent Contributor

Re: IRA


mongstradamus wrote:

PinkPanther3719 wrote:

Thank you all for all the advice. I've opened a Roth IRA with Vanguard since they were the one that seemed to be most recommended. My brother-in-law is going to help me a bit as I found out he's really knowledgeable about these things. I'm thinking of emptying one of my rainy day savings into the fund then just split up the amount I normally put in savings.

 

 

Also, I'm a she...at least I was the last time I checked.Smiley WinkSmiley Very Happy


the one thing i would note is you should always have an emergency fund in an saving account or something that you could get to in a pinch. I wouldn't call IRA that liquid of an account. Just in case something happens if you lose your job or some kind of medical emergency or something like that. 

 

Vanguard is an good choice with roth , i have one with them as well :-)


I am curious about this comment as I've been thinking about transferring funds to and using a Roth IRA for this purpose.  Hopefully, I will not need to withdraw funds from the Roth IRA for emergencies, but I was under the impression an account holder could withdraw contributions at no penalty any time, most having check writing abilities?

Message 14 of 20
Super Contributor

Re: IRA


etx wrote:

I am curious about this comment as I've been thinking about transferring funds to and using a Roth IRA for this purpose.  Hopefully, I will not need to withdraw funds from the Roth IRA for emergencies, but I was under the impression an account holder could withdraw contributions at no penalty any time, most having check writing abilities?


For a Roth IRA, since your contributions are post tax, you may withdraw principle without penalty at any time.  

 

However, capital gains may only be withdrawn tax free under the following:

 

1.  First $10K on a first time home purchase.

2.  Certain one time Education expenses.

3.  Medical Emergency/Disability

4.  Early Retirenment - Filing of 72t.

5.  Post 59.5

 

In any other scenario, the withdrawing of capital gains will incur a 10% penalty, along with ordinary income taxes on the gains.  

 

*Disclosure*  Not a CPA, and this is from my best recollection.

Message 15 of 20
Frequent Contributor

Re: IRA


etx wrote:

mongstradamus wrote:

PinkPanther3719 wrote:

Thank you all for all the advice. I've opened a Roth IRA with Vanguard since they were the one that seemed to be most recommended. My brother-in-law is going to help me a bit as I found out he's really knowledgeable about these things. I'm thinking of emptying one of my rainy day savings into the fund then just split up the amount I normally put in savings.

 

 

Also, I'm a she...at least I was the last time I checked.Smiley WinkSmiley Very Happy


the one thing i would note is you should always have an emergency fund in an saving account or something that you could get to in a pinch. I wouldn't call IRA that liquid of an account. Just in case something happens if you lose your job or some kind of medical emergency or something like that. 

 

Vanguard is an good choice with roth , i have one with them as well :-)


I am curious about this comment as I've been thinking about transferring funds to and using a Roth IRA for this purpose.  Hopefully, I will not need to withdraw funds from the Roth IRA for emergencies, but I was under the impression an account holder could withdraw contributions at no penalty any time, most having check writing abilities?


You are right.  A person can withdraw their contributions from a Roth IRA at anytime without penalties. 

Message 16 of 20
Contributor

Re: IRA


mongstradamus wrote:

PinkPanther3719 wrote:

Thank you all for all the advice. I've opened a Roth IRA with Vanguard since they were the one that seemed to be most recommended. My brother-in-law is going to help me a bit as I found out he's really knowledgeable about these things. I'm thinking of emptying one of my rainy day savings into the fund then just split up the amount I normally put in savings.

 

 

Also, I'm a she...at least I was the last time I checked.Smiley WinkSmiley Very Happy


the one thing i would note is you should always have an emergency fund in an saving account or something that you could get to in a pinch. I wouldn't call IRA that liquid of an account. Just in case something happens if you lose your job or some kind of medical emergency or something like that. 

 

Vanguard is an good choice with roth , i have one with them as well :-)


I have two main savings accounts. One that is at the same bank as my checking account and one at a separate bank with a higher apr. I plan on moving the amount (minus $500) to my ira from the one connected to my checking and just depositing what I normally put into that savings into my ira. And it is a Roth IRA and I'm mailing the letter to transfer my 401k on Monday.

Current Information (05/2016)
Scores: EX: 633, EQ: 619, and TU: 727
Current Utilization: ?%

Goal: All above 750 and no more than 3% utilization
Gardening until 12/31/16 (Hopefully)
Message 17 of 20
Established Contributor

Re: IRA

You can withdraw from you IRA. But you can't put it back. Only 5.5k for the current year.

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Message 18 of 20
Super Contributor

Re: IRA


KittenAttack wrote:

You can withdraw from you IRA. But you can't put it back. Only 5.5k for the current year.


A standard IRA?  Sure, you can always withdraw, but there will be a 10% penalty, except under certain conditions.  But, if the Funds are returned to another/same IRA with 60 days, the penalty and tax are avoided.  However, this can only be done ONCE per year.  In the past, a person had this privilege per IRA account, but this has recently changed.

 

For a Roth, since all contributions (sans gains) have already been taxed, they may be withdrawn without penalty, at any time.

 

*Edited* PS - The once per year restriction does not apply to Institution to Instiution Transfers.

Message 19 of 20
Regular Contributor

Re: IRA

Many others have already mentioned investment options that would work well for you. I personally have my IRAs with Capital One Investing (Formerly Sharebuilder with ING) and I really like their website and low cost options. Trading prices are low, especially if you setup "automatic investments" which will place trades once your cash balance is above a certain threshold on Tuesdays only. They also have many no fee mutual funds to choose from, although personally I prefer ETFs. You are young, don't be afraid to stay rather aggressive at this point. Also, definitely do a Roth. Again you are young and it is very safe to assume your tax bracket is much less now than it will be in retirement. And if you can max it out do it, take advantage of the tax free withdrawals in retirement and the power of gains over such a long time horizon! I would also push your employer to start offering a 401k or similar plan if you wish to contribute more towards your retirement.

 

If you are maxing out your IRA and have a healthy savings account in place there are some options to contribute towards retirement with post tax contributions such as a variable annuity or universal life. This is where you would want to work with a knowledgeable fee-based adviser to make sure you are doing the right thing and go with the right company as they can vary greatly.

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Message 20 of 20