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Author: gotnodoe Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75376  
Subject: where to open a roth ira Date: 1/6/2002 1:46 AM
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Hi,

I'm 29 and have done no retirement planning yet. I want to open a roth ira and put contribute the max for 2001 & 2002 so I need to open one soon. My job does no matching with the 401k so i decided not to use it. (Incidentally, should I use their 401k plan anyway even if they don't match?)

My main question is which mutual fund company should I open it with? I've looked at etrade(whom i do my trading with), ameritrade, troweprice, fidelity, vanguard, etc and I still can't decide. Basically I'm looking for a good place to start. I don't know much about mutual funds yet so I may get that complete idiots guide too =)
requirements include good website with tons of info and ease of use, if that even exists when it comes to retirement plans hehehe. I don't want to have to think too much about it ...at least not until I learn more about this.

Any suggestions?

-T
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Author: jbking Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33115 of 75376
Subject: Re: where to open a roth ira Date: 1/6/2002 2:27 AM
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Greetings T,

I'm 29 and have done no retirement planning yet. I want to open a roth ira and put contribute the max for 2001 & 2002 so I need to open one soon. My job does no matching with the 401k so i decided not to use it. (Incidentally, should I use their 401k plan anyway even if they don't match?)

Depending on the quality of the choices you may get a better index fund in a 401k than in an IRA if you can get one of Vanguard's Institutional funds that have expense ratios of .06% or less in some cases.

My main question is which mutual fund company should I open it with?

Get thee "Mutual Funds for Dummies" by Eric Tyson and read it and then determine who has the funds you want and which route, ie fund supermarket or fund family, makes sense for how you want to set things up.

I've looked at etrade(whom i do my trading with), ameritrade, troweprice, fidelity, vanguard, etc and I still can't decide. Basically I'm looking for a good place to start. I don't know much about mutual funds yet so I may get that complete idiots guide too =)
requirements include good website with tons of info and ease of use, if that even exists when it comes to retirement plans hehehe. I don't want to have to think too much about it ...at least not until I learn more about this.

Any suggestions?


Other suggestions would include the following, IMO:
http://www.vanguard.com/educ/inveduc.html
http://moneycentral.msn.com/articles/invest/invfund/contents.asp?p=2
http://boards.fool.com/Message.asp?mid=15837962

FWIW, I use Vanguard and have had no problems.

JB

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33124 of 75376
Subject: Re: where to open a roth ira Date: 1/6/2002 2:36 PM
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In addition to the good advise JB has given you, you might also look into TIAA-CREF. (www.tiaacref.com)

My husband and I own Roths at both Vanguard and TIAA-CREF. I'm very happy with both. I do like TIAA's website a little better, but only because I feel it's more user-friendly. Vanguard's site definitely has more information on it, but not anything that I seem not to be able to get without logging on. (Did that make sense?) I could be wrong, but it seems that way to me.

You also might want to look into the fee structure between the two companies. Here's a link to a post I wrote re: Vanguard's fees:

http://boards.fool.com/Message.asp?mid=14988801

I've also heard good things about Fidelity. I think the difference between Fidelity and Vanguard is something like the personal preference between Pepsi and Coke, or Gibson and Fender. They both offer great funds and services, it just seems to be personal preference. I can't comment on the site because I don't go there much and I don't have an account there.

I will reiterate JB's suggestion about getting "Mutual Funds for Dummies." It will open up a whole new level of understanding for you. Eric Tyson, the author, also has written another one, which is very good, called "Personal Finance for Dummies." I read both and highly recommend both.

Good Luck,
Caat



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Author: gotnodoe Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33125 of 75376
Subject: Re: where to open a roth ira Date: 1/6/2002 3:52 PM
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Thanks for the great info, JB! Those links will help greatly with my decision making. My last employer used vanguard. I think I will look at them more closely before I make a decision who to go with.

dummies book, huh? hmm.. i hadn't allowed for book purchases in this year's budget.. If I like the cover, well...

-T

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Author: gotnodoe Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33131 of 75376
Subject: Re: where to open a roth ira Date: 1/6/2002 6:27 PM
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Thanks, Caat.

It looks like tiaa would be better for me to start. I'm better off there until I accumulate 10k or more to avoid vanguard's fees. I'll be putting in 5k for 2001 & 2002, 3k in 2003. I figure I'll have 10k or more by 2004. But what are the costs of transferring to vanguard in 2-3 years? Are there xfer fees?

Since I'm sortof new to this, it's hard for me to tell if i'm better off starting with vanguard from the get go. I may decide later to transfer to a totally different company but for arguments sake, I'm thinking tiaa now vanguard later? or just vanguard now?

Also keep in mind, I don't want to have to create my own mutual funds portfolio yet. I don't know enough to do it! I want at least for the first year or so, to have it done for me.... some kind of mixture, if you will. IOW, some fixed mixtures of funds.. (hope that makes sense)

What do you think?

-T

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33132 of 75376
Subject: Re: where to open a roth ira Date: 1/6/2002 6:56 PM
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T.

No transfer fees that I know of. Here's an article that might help. It's a little outdated in that the minimum inital investment has been raised from $250 to $500 for IRAs and $1500 for taxable accounts, and the $25 minimums have been raised to $50. I think, however, you will still find it helpful. That's really all that has changed, to the best of my knowledge.

http://www.indexfunds.com/articles/20001115_VG-TIAA_com_tax_JK.htm

I opened my Roth there with the same idea of transfering it to Vanguard when I reached 10k. I may still do that -- on the other hand, I like the fact that I can have several different funds in my roth, with low balances, without being charged fees for all of them. It gives me more of a chance to control my diversification.

They are set to raise their expense ratios in 2006 (they have a temporary 'sale,' if you will) -- if they do that, I will most-likely transfer, but they've extended that once already. My feeling is that they will probably make that low expense ratio permanent at some point. We'll see. For the mean time, I'm pretty happy with them.

Glad you're considering the 'Dummies' book in your budget -- the cover is a pretty yellow. <grin>

Hope this helps.
Caat

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