What is a Roth IRA? This plan allows you to invest after tax dollars into a retirement account and have that money grow tax free over the long term until you retire. When you retire you are able to pull money out of your account without having to pay taxes or fees on it.
This plan helps you get a nice tax break on your investment. So how do you start a plan and start investing your money? Firstly there are some IRA eligibility things that you have to look at.
Your (Modified Adjusted Gross Income) should be below a given level in order for you to be able to invest money into a Roth IRA. For 2010 you have to make below $120,000 a year to qualify if you are single or below $177,000 a year if you are married.
Once you know that you are able to start a Roth IRA the next step is to look for places to open up the account with. Most banks and brokerages will have their own verson of an IRA that you can open.
Don’t simply sign up for the first place that you see, instead shop around a little bit so that you know that you are getting the best deal.
The biggest thing to consider is how much it cost and what are the fees. Unfortunately getting into a Roth IRA is not free. Companies may charge fees to, open up an account, manage it, and buy and sell investments in it. The first thing to look at with brokers is which one will be the least expensive. It is no fun opening up an account and see all of your money go to a third party because of fees and expenses.
Another thing to keep an eye out for is what investment options the plan allows you to get into. If the fees are low but the only thing you can invest your money into is in the money markets, then you might want to consider looking elsewhere. Basically make sure that any plan that you are investing into allows you to invest into the options that you want to invest into.
