Friday, January 11, 2008

Roth IRA selected

In my efforts to get more money going into retirement accounts for both my wife and I, this week was spent doing a lot of research on what fit the needs of my wife and I the best. After visiting the IRA Online Resource Guide, and Fairmark's Guide for starting a Roth IRA, I formed an idea of how to approach opening up two accounts - one for my wife and one for me. Income limits are the same, no matter what company you choose to open your Roth IRA through. Since I'm opening this in 2008, I won't worry about 2007 limits. Because I'm concerned with my wife and I, I did not worry about single filer limitations either. If you make less than $159k, you're eligible. My wife and I fit into that category (for now), so I think even if we surpass that in the future, I'll be able to have money in an old-age "Rainy day" account. Each account is restricted to a maximum of $5,000 per year, unless you are 50 or over. If you're over 50, you cam make additional "catch-up" contributions of an additional $1,000 per year. The companies I considered and on whom I performed research were:

American Century
e*Trade
Fidelity
ING Direct
Schwab
T. Rowe Price
TD Ameritrade
OptionsXpress
ScotTrade
Vanguard

I'm sure I missed one or two, but I made sure I checked with at least the four with whom I already have accounts and offer a Roth (e*Trade, Fidelity, T. Rowe Price). I also have a 401(k)
with ADP, but they do not offer a Roth IRA.

I did not have extra money to open an account, so that eliminated a few of the companies. I didn't want to start out contributing a ton of money, thus reducing the amount I contribute to my own company's 401(k) because that has tax implications of which I may not be aware. I'll be spending some time researching the options I have before me. So, for now, I selected a company that had no minimum to open the account and no fees if I contributed at least $50 two times per month. The minimum is what I am doing, but I do expect I will be able to increase that to the maximum within a few years. For now, it looks like my wife and I will have at least $1,200 each in a Roth IRA by the end of 2008!

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