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Author: AlexTriana Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Young and ready to invest Date: 3/5/2001 7:35 PM
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I'm 24 and just got a good job just wondering what would be better for for me to invest in Roth or Traditional. I already invest 20% into my employer 401k and 20% into my employer stock plan. Any advice? And are there any other good informative web sites( Other than the Motley Fool which I think i've read every single web page) that I can also check out.

Thanks
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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: 28290 of 75339
Subject: Re: Young and ready to invest Date: 3/5/2001 7:42 PM
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Take a look at this page to see if the Traditional would be deductible in your case sinc you are covered by an employer retirement plan:

http://www.irs.gov/forms_pubs/pubs/p5900108.htm

Similarly, http://www.irs.gov/forms_pubs/pubs/p590toc.htm is the Table of Contents on the IRS publication dealing with IRAs.

A couple of other sites I like to use would include www.morningstar.com and www.moneycentral.com.

JB



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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28291 of 75339
Subject: Re: Young and ready to invest Date: 3/5/2001 9:36 PM
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First off, congradulations on the good job and the foresight/interest in investing early. Now, the friendly advice.

I'm sure you've read about retiring debt (school loans, credit card, etc.) and then establishing an emergency fund. Won't dwell on that.

Before we cover IRAs, let's revisit the 401k, etc. I would only invest in the 401k up to employer match. I would also be leary about putting so much into my employer's stock plan. It's like putting all or most of your eggs in one basket. You're employeed by them and then you're betting your retirement (or significant portion) on them as well. If the company has a bad year or goes down hill, you've lost your job AND a significant portion of your retirement savings.

Now IRAs. I'd definitely invest in the Roth if you qualify. Forget about Traditional even if you can write it off. At your age, by the time you retire, you'll easily amass one or two million, ALL TAX FREE FOREVER. The only way you'd come out ahead with a Traditional is if you'll DEFINITELY be in a lower income tax bracket after retirement. Chances are, you're just now starting out and will advance in your career, make higher incomes, etc, etc, and save enough to keep yourself in that higher bracket. The only way to go into a lower bracket, or stay there (I'm generalizing, no flaming) is if you're in a low skill, low paying job now with no chance of improvement, or your job skills, etc, go down the toilet.

So, in summary, Roth if you qualify, Traditional if you have no other option.

JLC

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28299 of 75339
Subject: Re: Young and ready to invest Date: 3/6/2001 10:12 AM
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At your age, by the time you retire, you'll easily amass one or two million, ALL TAX FREE FOREVER.

assuming, of course, that they raise the estate tax exemption or repeal it. Roth IRAs are still subject to the estate tax, even if they're never subject to the income tax.

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