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Author: royinstl Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308848  
Subject: Re: Retirement vs. Snowball Date: 9/14/2005 3:10 PM
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Mew5280,

Others could probably answer this better but a ROTH IRA is very different from a 401K or traditional IRA. Contributions are post taxed so you get no tax advantage on the front end. But all the interest and principal is tax free forever, so say you put in 4K this year 30 or so years go by and it grows 40K you can withdraw all or any portion of that after 591/2 tax free. If you do this year after year this could be a great deal of capital with both principal and interest tax free. 401K are usually very restricted to only a few funds or investments from your employer so it usually is a better choice to contribute up to the employer matching and max out ROTH or IRA before contributing more to 401K. There are other advantages to ROTH you can withdraw the principal after 5 years without the 10% penalty but IMHO once you put money in a ROTH you should leave it alone since you can only put in 4 K a year (goes up to 5K in 2007) and let compound interest do its magic.

www.morningstare.com has good learning tool on ROTHs as well as TMF discussion boards.

IMHO one of the best discussion boards for investing is the index fund at least to learn about investing. I am in that category. I have lurked a lot over their chinwiskers has some excellent posts as well as others, But again I am biased toward index funds at least for retirements funds. Who knows I get rid of all this crappy debt I might become a day trader (yea right)
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