Roth IRA strategy for young person

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Roth IRA strategy for young person

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Posted 01-09-2012, 06:57 AM

IvoryCadenza

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Roth IRA strategy for young person

I just got into investing. I'm a grad student who will be finishing school next year and I have an emergency fund and have some money to invest. I've opened a Roth IRA with TD Ameritrade but not funded it yet. I'm 24 years old and I'm not sure what I should be investing the IRA money in. Should I just choose and Index fund of some kind? I'm assuming that I should be going for a balanced investment approach since I have at least 36 years for the account to grow. Would it be best to just buy an S&P index fund or are there specific retirement ETFs that are better diversified? Or should I not be putting it into an ETF but into stocks? I'm planning on just putting $2000 in this year.

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01-09-2012, 06:57 AM
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01-09-2012, 07:22 AM

provicemo L4: Apprentice Member sinceJun 2008 Posts309 Reputation 82 Followers 0 + Give Rep	Buy an ETF for the Total Market until you have enough cash (and knowledge) to diversify into individual stocks. With only 2K, you'll lose most of it in comissions trying to spread it around.
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01-09-2012, 07:33 AM

IvoryCadenza L3: Novice Original Poster Member sinceMay 2011 Posts154 Reputation 53 Followers 0 + Give Rep	What about target date retirement ETFs? Are these worth a look, or should I just pick a whole market ETF? Looks like Ameritrade offers this target retirement 2050 fund. http://finance.yahoo.com/q?s=TZY&ql=1
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01-09-2012, 10:11 AM

executivedealer

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Ivory, just so you know I started my IRA Roth account right at your age now. I'm 26 now and have been with Vanguard since. I started out on a different path but later went into a 2050 target retirement fund, it's pretty much automated for the most part and becomes extremely beneficial if you are a busy guy which makes it pretty damn nice to have. They have almost little to no fees amongst their competitors and good service.

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01-09-2012, 10:35 AM

Samstag L4: Apprentice Member sinceJun 2007 Posts408 Reputation 137 Followers 0 + Give Rep	Be aware that you need earned income to contribute to a Roth. If you contribute $2000 to a Roth for 2012 you'll need to show at least $2000 of income on your tax return.
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01-10-2012, 06:08 AM

qwertyaas L6: Expert Member sinceJul 2007 Posts1,980 LocationNew York Reputation 154 Followers 0 + Give Rep	With $2,000 open up a Vanguard RIRA and put it in Vanguard Target Retirement 2030. It sits at 56/24/20 Total Stock Market/Total Intl Stock/Total Bond. Overall 80/20 stocks to bonds. If you want to be a little less risky, go for 2025. Just a note, if you invest in target funds, don't pick it based on target retirement date. Pick it based on your desired asset allocation.
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01-10-2012, 11:26 AM

Brian1

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Quote from IvoryCadenza

What about target date retirement ETFs? Are these worth a look, or should I just pick a whole market ETF? Looks like Ameritrade offers this target retirement 2050 fund.

http://finance.yahoo.com/q?s=TZY&ql=1

If it were me I'd open a Roth IRA with Vanguard and fill it with their target retirement fund. Vanguard offers the lowest fees in the industry.

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Comfort is the enemy of achievement.
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Roth IRA strategy for young person