Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Opening a new ROTH IRA
Old 01-17-2008, 05:53 PM   #1
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
Opening a new ROTH IRA

OK, I'm ready to open a ROTH IRA with Vanguard. I have the money to fully fund for 2007, but with the current down trend in the stock market, I'm not sure if I should proceed or hold on just a bit to see if things get better. I don't have to act until the IRS tax deadline, which of course is April 15th. I was planning to invest my IRA in a Target Retirement fund, most likely the 2015 which will have at least a good slice of stocks along with the safer stuff. I figure not to touch the ROTH for 10 yrs, and I will be 50 tomorrow. So...should I hold on a little while, but do it before the tax deadline, or should I go ahead & do it now? This will be my first IRA, and since I max my TSP/401 I can only do a ROTH.
__________________

__________________
“Change is the law of life. And those who look only to the past or present are certain to miss the future.”
-John F. Kennedy

“Hard work never killed anybody, but why take a chance?” - Edgar Bergen
martyb is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-17-2008, 06:29 PM   #2
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
martyb, can you go ahead and open it now, put it into MM and transfer it when you're ready?

Personally I'd go for the target retirement fund anyway -- 10 years is a long time.

Coach
__________________

__________________
Coach is offline   Reply With Quote
Old 01-17-2008, 06:39 PM   #3
Thinks s/he gets paid by the post
Goonie's Avatar
 
Join Date: Oct 2006
Location: North-Central Illinois
Posts: 3,198
If it were me, I'd go ahead and do it now while the prices are low. If you wait until "things get better" (assuming that by that, you mean the market starts picking up again) you'll be purchasing less shares with the same amount of money. So I'd buy now while there's a 'Blue Light Special' sale going on.

I just made my last contribution to my Roth IRA, a Target 2020 at TRP, about a week or so ago. I sort of wish I would have waited, since share prices are lower now than they were then. But I'm not a market timer, and I just wanted to finish getting it maxed out for 2007. Now I'll just kick back and let it cook for at least the next 10 years or more.

It's something about 'buy low, sell high'.......at least that's how I see it.

YMMV
__________________
Goonie is offline   Reply With Quote
Old 01-17-2008, 08:56 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
There's an old saying:

"The best time to invest in the markets, is when you have the MONEY to do so"..................
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 01-17-2008, 09:33 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
I'll second the money market option. Then you can buy into the fund in smaller steps throughout the year.

If you don't want to spend that much time on it, buy the fund now and don't worry about it. You'll still be buying at a lower price than most of last year and Morningstar has been claiming the market was about fairly priced last year.

Try not to wait for the perfect time to invest. You'll only know that after it is gone.

Dan
__________________
Animorph is offline   Reply With Quote
Old 01-18-2008, 11:53 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,971
I would fully fund it as soon as your able to do so. If your that worried about the markets ups and downs you could DCA.
__________________
aaronc879 is online now   Reply With Quote
Old 01-18-2008, 12:12 PM   #7
Recycles dryer sheets
BigBob's Avatar
 
Join Date: Apr 2007
Location: Sebring
Posts: 190
Why not put your mind at ease and spread your contributions over 4 months and forget about it? DCA to the rescue.
__________________
BigBob is offline   Reply With Quote
Old 01-18-2008, 01:54 PM   #8
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
Quote:
Originally Posted by BigBob View Post
Why not put your mind at ease and spread your contributions over 4 months and forget about it? DCA to the rescue.

Minimum to open an IRA with Vanguard is $3K so not much way to DCA into a new account. I'll probably just go ahead and start with the whole amount. I just turned 50 today, so I guess I can't invest $5K since I wasn't 50 in 2007. I'm going to try to scrape up enough to open one for the DW too before April 15th. And then, hopefully we can also fund for each of us for 08 and from now on. Thanks for the replies!
__________________
“Change is the law of life. And those who look only to the past or present are certain to miss the future.”
-John F. Kennedy

“Hard work never killed anybody, but why take a chance?” - Edgar Bergen
martyb is offline   Reply With Quote
Old 01-18-2008, 02:52 PM   #9
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Happy Birthday Marty, welcome to the other side of the mountain.
__________________
73ss454 is offline   Reply With Quote
Old 01-18-2008, 10:50 PM   #10
Thinks s/he gets paid by the post
Goonie's Avatar
 
Join Date: Oct 2006
Location: North-Central Illinois
Posts: 3,198
Quote:
Originally Posted by martyb View Post
Minimum to open an IRA with Vanguard is $3K so not much way to DCA into a new account.
At T. Rowe-Price the minimum to open an IRA (Roth or regular) is $1K plus monthly systematic ACH deposits.

Fidelity also lets you open an IRA with their SimpleStart. It requires $200 to open, and $200 per month or per quarter by ACH.
__________________
Goonie is offline   Reply With Quote
Old 01-19-2008, 12:36 AM   #11
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 831
With a brand new account and with Vanguard minimums per account and per investment in particular funds, averaging in may not be practical.

But since this is a brand new account, and it is $4000 or less amount, and market is already off substantially from the high, I'd say forget about timing and just get the money in. Now.

Seems like "now" in the long run usually ends up being as opportune a time as any. And a Roth IRA is a "for the longrun" type investment.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
RetireeRobert is offline   Reply With Quote
Old 01-19-2008, 06:05 AM   #12
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,869
Quote:
Originally Posted by martyb View Post
Minimum to open an IRA with Vanguard is $3K so not much way to DCA into a new account. I'll probably just go ahead and start with the whole amount. I just turned 50 today, so I guess I can't invest $5K since I wasn't 50 in 2007. I'm going to try to scrape up enough to open one for the DW too before April 15th. And then, hopefully we can also fund for each of us for 08 and from now on. Thanks for the replies!
Marty, I am a little hazy on this but I think the over-50 catchup first applies for the year that you turn 50. If so, you could only contribute $4K for 2007 but you could contribute $6K for 2008.

So, if you wanted to, you could contribute $3K now, $1K a month later, and then $1K of your '08 contribution each month for six more months. Don't know if that is what you had in mind.

Personally I have been contributing the whole amount each year in a lump sum, like you were tentatively planning, and picking a different mutual fund each time. I will probably do that again this year, too, though with my luck, I expect the market probably will go down after I send it in. It's really a small amount - - you're right.

And Happy Birthday!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 01-19-2008, 07:55 PM   #13
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Do it now!
__________________
free4now is offline   Reply With Quote
Old 01-22-2008, 06:24 AM   #14
Recycles dryer sheets
BigBob's Avatar
 
Join Date: Apr 2007
Location: Sebring
Posts: 190
Quote:
Originally Posted by martyb View Post
Minimum to open an IRA with Vanguard is $3K so not much way to DCA into a new account.
VG has a fund that I was turned onto called Star fund with $1k minimum and a .32 expense ration. (I had thought all with VG were 3K as well, until I did a rollover of about $1k - they set me straight)
https://personal.vanguard.com/us/fun...FundIntExt=INT
So you still have some options with Vanguard, if that is your preference.
__________________
BigBob is offline   Reply With Quote
Old 01-22-2008, 07:44 AM   #15
Recycles dryer sheets
StJohnsWood's Avatar
 
Join Date: Jan 2008
Posts: 157
I would put it in the MM and spread it over the next 3 months. Good Luck with your choice.
__________________
StJohnsWood is offline   Reply With Quote
Old 01-22-2008, 08:24 AM   #16
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
You might be retiring in 10 years, but the money will be in there for 40 years. 40 years from now won't matter if you put money in today, tommorrow, next week or next month. So put money in while you have it. If nervous, put 50% into stocks and 50% into money markets.

Generally speaking, do not look at current market performance to decide when to invest. Have an asset allocation with a core fund. You should have confidence an investment in that core fund at any time, in any market period, is a good investment. If you don't have that confidence, you should not be investing, or you need to change your asset allocation and core fund within that allocation.

My core fund is PRFDX and I add to it 12 months per year, regardless of market performance.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 01-22-2008, 04:49 PM   #17
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
Quote:
Originally Posted by jIMOh View Post
You might be retiring in 10 years, but the money will be in there for 40 years. 40 years from now won't matter if you put money in today, tommorrow, next week or next month. So put money in while you have it. If nervous, put 50% into stocks and 50% into money markets.

My core fund is PRFDX and I add to it 12 months per year, regardless of market performance.
Actually, I'm retiring in 4 yrs, 11 months,26 days, but who's counting?
You're right, though about the money staying in the account for a much longer period. We're planning for the ROTH money to be our emergency stash later on down the line. I have one COLA pension starting when I retire, and a 2nd one that begins 5 yrs later (age 60). Our combined TSP/401's will add some extra security, plus the DW will keep working for 3 years after I retire, so we'll continue to fund the ROTH's thru that period, a total of 9 yrs of ROTH's counting 2007. We won't be the Rockefellers but we should be able to avoid dog food. Thanks for all the great advice!

p.s. I won't get much SS because as an old-system Fed I don't pay into it. I earned my basic 40 quarters back in the 70's so I might see $300 a month. DW will get more, but she never made a big salary so we don't expect a huge amount there either. Maybe $10K per year or so. Her 401k is her only retirement.
__________________

__________________
“Change is the law of life. And those who look only to the past or present are certain to miss the future.”
-John F. Kennedy

“Hard work never killed anybody, but why take a chance?” - Edgar Bergen
martyb is offline   Reply With Quote
Reply

Tags
ira


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Roth 403(b), Roth IRA and 'earned income' ERD50 FIRE and Money 16 02-24-2008 08:00 PM
Can I max out my Roth IRA, Trad. IRA, and SIMPLE IRA? thefed FIRE and Money 9 09-24-2007 05:52 PM
Any advantage to opening up a ROTH in retirement? Cattusbabe FIRE and Money 19 02-21-2007 05:51 PM
?? for uber-savers, non-deductible IRA to Roth IRA in 2010 LOL! FIRE and Money 8 12-21-2006 01:25 AM
Opening a kid's Roth IRA Nords Young Dreamers 70 06-06-2005 08:40 PM

 

 
All times are GMT -6. The time now is 11:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.