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Greetings, xMoNeYMaKeRx, and welcome. You asked:

Im a 21 year old full-time student who is currently unemployed and I was wondering if I should start investing now in a regular Individual Account or wait until I get a job which will probably be in a couple years and open a Roth IRA Account? From what I read there are tax advantages with the latter. I know its better to start investing as early as possible, so should I start investing now or later?

As you say, the earlier you start, then better. If you can afford it as an unemployed student, then certainly you can set aside money in a taxable investment account for yourself. Because you have no earned compensation (i.e., job wages), you may not make a contribution to an IRA at this time. For details on IRAs, see our IRA area at .

is it possible for me to transfer my Individual Account to a Roth IRA Account?

An IRA may accept an annual cash contribution of up to $2,000 provided you have earned compensation or it may accept a rollover contribution of any amount from another IRA or from an employer's qualified retirment plan. The latter transfer may be to a traditional IRA only. In your case, if you open a taxable account today, then when you begin work later you may open a Roth IRA; however, you may only contribute up to $2K to that Roth based on your job income. Whether that $2K comes from stocks you sell from the taxable account or from your wages doesn't matter. All that matters is the IRA contribution must be made in cash and it cannot exceed $2K.

It's great you're thinking of investing at your age. The power of compounding works best with an early start, and it will enable you to retire much earlier than you might think possible today.

I suggest you begin your program as early as you feel comfortable in doing so. To help you in that regard, we have a lot of material on this site to teach you the basics of investing. I suggest you look them over starting first with "The 13 Steps to Investing Foolishly" at followed by "Investing Basics" at . Both areas will give you a wealth of background as you start out on your investment program.

Good luck, and Fool on!

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