Starting a roth IRA

[wvufan1985]

Hello all:

I am considering starting a roth ira at Vanguard. The particular fund I am looking at is the "Vanguard 500 Index Fund Investor Shares". It requires a 3000 initial deposit. My questions are:

Is this a good fund to start with?

Should I wait until the markets stabilize before I open it or does it even matter?

I will be graduating from college in december and I expect to have a good job with a 401k. I also have 9k in savings with no debts.

Thanks for you help and advice.

[maat55]

The 500 index fund has an average return of 10.96 since 1976. I personally would be more interested in the Health care fund averaging over 17% since 1984.

But, no matter what fund you pick, buying now is a great idea.

[wvufan1985]

Minimum investment for the health care fund is 25,000....

[KGeary]

Start now. You'll buy in at a discount.

[maat55]

Minimum investment for the health care fund is 25,000....

I'm in the health sciences fund with T. Rowe Price, you can get into it with a 50.00 monthly asset builder. It has averaged 12.09 since 1995.

[amarowsky]

I'm in the health sciences fund with T. Rowe Price, you can get into it with a 50.00 monthly asset builder. It has averaged 12.09 since 1995.

I'm currently maxing my 401k and VERY interested in jumping into a roth IRA while market is such a long term buyer's market. So I have a few questions.

1. I also don't have a lot of money to throw into a fund immediatly and i want to start a % of my check to go into my Roth rather than a lump sum.

2. Is "asset builder" what I think it is (no huge minimum to start up and just $50 monthly contributions)?

3. And if that is what I thought (see question 2) do a lot of companies offer that method of investment or is that proprietary to T. Rowe Price?

[atomicrc11]

1. I also don't have a lot of money to throw into a fund immediatly and i want to start a % of my check to go into my Roth rather than a lump sum.

2. Is "asset builder" what I think it is (no huge minimum to start up and just $50 monthly contributions)?

3. And if that is what I thought (see question 2) do a lot of companies offer that method of investment or is that proprietary to T. Rowe Price?

1. That is a good plan. I make bi-monthly contributions to my Roth.

2. Yes, it means no minimum and you should maintain putting in the amount they recommend until you have the find minimum. At $50 with T. Rowe Price you will end up paying the low balance fee a few times while you get up to the minimum.

3. The other I know of is Fidelity, which is how I started my Roth IRA. Fidelity does basically the same thing as T. Rowe Price but call it a SimpleStart IRA and you start in a Freedom Fund based on your retirement age. The minimum is $200 per month and should get you past the $2000 mark by 1 year which will allow you to avoid the low balance fee. Most Fidelity funds have a minimum of $2500 to open them without the SimpleStart feature.

I started out putting in $200/month into the Freedom 2045 fund and now I'm up to $200 twice per month. I really like Fidelity and have all my accounts (Brokerage, Roth IRA, 401k and 403b) there.

[project15]

I just opened a Roth IRA for my wife with Vanguard (I already have one through Vanguard as well). I bought $3k in the Target Retirement 2045 fund. I think Vanguard is great - I've been with them for 6 years now and have no complaints. Their low fees were what attracted me to their funds.

[amarowsky]

Does vanguard offer a good "simple start" program. Because I have my 401k through them and I have heard good things about the company.

In one of my smart money magazines I read that Fidelity is currently showing some of the worst returns in response to the uneasy market currently. Something like and average fund is at a current YTD return around 25% I believe (dont hold me to that). I know this is just because the market is soo crummy, but I would prefer vanguard right now if I had a choice.

Plus I would like my 401k and my Roth IRA to be eaiser to view one another side by side through the same company.

[KGeary]

Does vanguard offer a good "simple start" program. Because I have my 401k through them and I have heard good things about the company.

In one of my smart money magazines I read that Fidelity is currently showing some of the worst returns in response to the uneasy market currently. Something like and average fund is at a current YTD return around 25% I believe (dont hold me to that). I know this is just because the market is soo crummy, but I would prefer vanguard right now if I had a choice.

Plus I would like my 401k and my Roth IRA to be eaiser to view one another side by side through the same company.

They don't. I also want to go with Vanguard. What I did was start a Roth IRA at T.Rowe price. I'm going to add to a fund at T.Rowe using their auto asset builder and when that funds reaches $3000 I'm going to transfer it to Vanguard. Then I'll repeat the process until I have all four Vanguard funds that I want.

After you reach the $3000 minimum, Vanguard has an automatic asset builder feature that lets you contribute a set amount each month.

[disneysteve]

The 500 index fund has an average return of 10.96 since 1976. I personally would be more interested in the Health care fund averaging over 17% since 1984.

I agree that Vanguard Healthcare is a great fund. I've owned it for many years. For someone just starting out, though, I wouldn't recommend it as a core holding. Sector funds are something that should come later in the portfolio-building process.

[amarowsky]

They don't. I also want to go with Vanguard. What I did was start a Roth IRA at T.Rowe price. I'm going to add to a fund at T.Rowe using their auto asset builder and when that funds reaches $3000 I'm going to transfer it to Vanguard. Then I'll repeat the process until I have all four Vanguard funds that I want.

After you reach the $3000 minimum, Vanguard has an automatic asset builder feature that lets you contribute a set amount each month.

that sounds like the method I'm going to wind up going as well. Ill start calling and researching around with T. Rowe fora bit. Thank you for the information

[bigsaver]

Good job starting a roth. Whatever you make grows tax free and you get to keep it all without paying taxes. Almost all people I know who are elgible don't use this vehicle.