I am far from a genius on this stuff, but feel free to ask. I'm sure someone here can get you an answer...
I have learned most of my stuff parusing fatwallet.com
Start there dbzeag, ALOT of good info
I am far from a genius on this stuff, but feel free to ask. I'm sure someone here can get you an answer...
I have learned most of my stuff parusing fatwallet.com
Start there dbzeag, ALOT of good info
This man speaks the truth.
I feel I'm in over my head with the whole investing thing, and I have to get smart about it really quick. I think at this point hiring a financial advisor is a must for Dan and I. Anyone else do this? What are your thoughts?
its really hot hearing fly talk investing.
Kiwi finds very little of things I do to be hot.
I'm all "Look Kiwi, I'm holding my AR15 and watching Robotech, are you turned on?"
She's all "No" and then leaves the room.
It's wierd.
what? I'm canadian. it was only very recently that i began to consider an american retirement plan.
what? I'm canadian. it was only very recently that i began to consider an american retirement plan.
what are the restrictions on an IRA? what are the benefits?
so an IRA is an investment account. I would open one with a brokerage then decide what stocks/bonds to buy with the money? do I then have to tell it each month what to buy when I make a contribution, or do I just set guidelines that when the money is deposited it buys automatically based on my preferences?Okay, there are basically two kinds:
Traditional IRA: This type of IRA essentially grows tax free (similar to a 401k) and then taxes are collected when you start making withdrawals. I say 'essentially' because any money you put into it has likely already been taxed (like your paycheck), so what happens is that your tax liability is reduced. For example, if you put in $5k this year (which is the limit), then your taxable income is reduced by $5k. Additionally, if for some reason, you need the money back from the IRA for an emergency, there is a 10% penalty and the taxes on that money become immediately due. Generally, traditional IRAs aren't your best place to start.
Roth IRA: A Roth IRA is an IRA that is funded with post-tax money. This means that you're taxed as you're putting it in, so its tax free at withdrawal. The advantage of this is that you're likely to be in a lower tax bracket now than you will be as you retire (you do plan on making partner at the firm eventually, right?) so end up paying less taxes with a Roth. Another "advantage" is that any of the money you put into the Roth (not any of the earnings) can be withdrawn at any time.
For most people, the BEST strategy is to max your 401k (if your company does any sort of matching), then max your Roth contributions ($5,000 for 2008), then max out your traditional IRA (another $5,000). If you have anything left over, only then should you get into taxable investments...
edit: Oh, and one more thing. You should NEVER have more than a 60/40 mix of stocks and bonds. If you do, there should be a VERY damn good reason. Being young and in the market for a long time isn't a good enough reason.
so an IRA is an investment account. I would open one with a brokerage then decide what stocks/bonds to buy with the money? do I then have to tell it each month what to buy when I make a contribution, or do I just set guidelines that when the money is deposited it buys automatically based on my preferences?
yes, but wouldn't you be buying a mix of different funds and bonds and whatnot, or would you just have it all invested in one fund that has the mix you want?Sorta, not really. It IS an investment account, but it has much different tax rules than a standard brokerage account because its strictly for retirement. And since its more for long term investing, you'd mostly be interested in funds rather than individual stocks (but you could buy indie stocks if you really wanted to - but I wouldn't recommend it).
Simply because I don't know your experience level, do you know how a fund works?
yes, but wouldn't you be buying a mix of different funds and bonds and whatnot, or would you just have it all invested in one fund that has the mix you want?