Need a little advice on "money investment" ie; Roth's, IRA's

I have never been that good at determining where it is best to put my hard earned money. I now have a nice bit saved, and I am trying to determine where is a good place to save/invest it. I was thinking of a Roth account or something along those lines. But since this is not my area of expertise, I thought I would ask others here.

If anyone has any good advice or knowledge on such matters I would love the input.

A Roth account is just a vehicle to shield it from taxes, which for retirement is an excellent move. Most Roth accounts have many investment options and that is the key.

A Roth account is just a vehicle to shield it from taxes, which for retirement is an excellent move. Most Roth accounts have many investment options and that is the key. Originally Posted by discreetgent

I am wondering what the long term % rate is comparable to other types of investments. Is the Roth account only subject to taxes if broken? I am assuming yes. Any other investment venues that might make for a better place to put my money?

You pay taxes when you withdraw at retirement age, the assumption is that you will be in a lower tax bracket at that point and you accumulate over time without a tax burden. Long term % will depend on what investments you make within the Roth plan, the Roth plan in itself doesn't change that.

You pay taxes when you withdraw at retirement age, the assumption is that you will be in a lower tax bracket at that point and you accumulate over time without a tax burden. Long term % will depend on what investments you make within the Roth plan, the Roth plan in itself doesn't change that. Originally Posted by discreetgent

You are confusing a Roth IRA and a traditional IRA.....limit your advice to things you know.....let me take over and give the correct advice.......

With a Roth IRA you have to have earned income.....you pay taxes on the money you put in and take it out tax-free [tax free appreciation!].......

If you don't have an investor's disposition and at least 15-20 hours a week to research investments, then buy an index fund for your IRA.......

You pay taxes when you withdraw at retirement age, the assumption is that you will be in a lower tax bracket at that point and you accumulate over time without a tax burden. Long term % will depend on what investments you make within the Roth plan, the Roth plan in itself doesn't change that. Originally Posted by discreetgent

No, in a traditional IRA, the contribution is excluded from income and what you take out in retirement is taxed -- hopefully at a lower rate. But the Roth is different. There is no deduction/exclusion from income for what goes in and what comes out is not taxable income (under current law).

No, in a traditional IRA, the contribution is excluded from income and what you take out in retirement is taxed -- hopefully at a lower rate. But the Roth is different. There is no deduction/exclusion from income for what goes in and what comes out is not taxable income (under current law). Originally Posted by pjorourke

You're a little late, I already cleaned up DG's messy advice..........

Your Mattress. Won't make any money, but keeps it safe, and if an emergency pops up(i.e. your next appointment), there it is!

You're a little late, I already cleaned up DG's messy advice.......... Originally Posted by Marshall

Life intruded before I could hit enter.

There are also limits to the amount you can contribute that depend on age and whether or not you're self-employed. If self employed, you can contribute a good deal more to a self-employed retirement plan (SEP). Whoever you invest with should be able to tell you what limits you're facing.

before you get into all these plans (& as some have alluded to indirectly), is this money you may need in the short term?????

the conventional wisdom seems to be keep at least 2-3 months of expenses in something liquid like a savings/checking account even if the return is small.

on the otherhand if it means eating Ramen Noodles never pass up a company match if it is significant

What they said, appreciate the correction.

Also, if memory serves me correctly, in either Roth or IRA...if you take out ANY money before retirement age, some of that becomes taxable plus a 10% penalty.

I would suppose any post-tax contributions would not be subject to income tax, if you withdraw early...i.e. Roth contributions??

Also, if memory serves me correctly, in either Roth or IRA...if you take out ANY money before retirement age, some of that becomes taxable plus a 10% penalty.

I would suppose any post-tax contributions would not be subject to income tax, if you withdraw early...i.e. Roth contributions?? Originally Posted by vkmaster

There is a 10% penalty on the amount withdrawn on an IRA before age 59.5. I am not sure about Roth accounts.

There is a 10% penalty on the amount withdrawn on an IRA before age 59.5. I am not sure about Roth accounts. Originally Posted by I B Hankering

They exist on Roth accounts too, except you can subtract your basis in the account from the withdrawal. I can personally attest to that one (the account had lost a little bit of money from what was put in and I paid no taxes).

There are 11 exceptions to the early distribution penalty, only 4 of them are at all common. I got to use 3 on one tax return this year, which was exciting to me.

But yes. When the feds say don't withdraw before 59 1/2 they mean it. If you are going to set aside, make sure you won't ever ever need that money for anything other than a medical catastrophe or college or to buy a house for the first time (3 of the exceptions).