josh7owens

I just turned 22 and feel the need to get my Roth IRA started. I read a article about how you can put $2000.00 in a Roth each year from the age of 20 until you turn 40 and then by the time you turn 60 it would be worth around $1M because of the compounding interest. It went on to say that if you start at 30 you won't be anywhere near $1M when you turn 60.

Alittle back ground

-22 years old
-own a 2000 s2k and it's been paid off since the day I've owned it.
-I have a paid off Macys account because I wanted to get a $1800 watch and if you signed up for the account you get 40% off your first item.
- I have a credit card that has a $1000 limit for emergencies that I keep around a $100 balance on and make the min payment to keep a credit history going.
- I live at home and I'm still in college
- I bring home (net) $960 every two weeks working at a hospital
- My only bills are that CC and $145 each month for full coverage car insurance.

two questions...

I'm still under my parents insurance because I have 2 tickets that don't come off my record until Feb 12 2012. I'm paying $145 for full coverage with them. I know, sounds high, my brothers had 3 wreaks and ruined there rates.

on Feb 12th my parents insurance company said they would make my own policy for the same price and he'll make it as if I've had insurance with them as long as I've been driving. (5+ years)

I checked rates today and progressive is saying with no tickets I can get full coverage for $100-110.00 a month depending on deductables. For liability it's only $48 a month.

Now for the question- At what time is it a better idea to only have liability and save $50-60 a month?





Roth-

When should I start my Roth IRA and how do I know what to invest it in?

Do I just go to my bank and say I want to start one or should I go elsewhere such as the online "top three" places?

I don't really know much about a roth IRA so I really don't know what to ask. Any input would be great.

magician

You would need to earn 10.5% interest per year to do that. That's unlikely.

josh7owens

I figure the gains wouldn't be that good but the point was I feel I should start early. I just don't know anything about it and need some guidance.

ViperASR

Take a look at Vanguard. I just opened a Roth IRA with them (maxed out my investment), using their STAR fund and a target retirement fund. Its a balanced fund, with a certain percentage in stocks, and a certain percentage in bonds. I tend to err on the side of caution, so I went with a pretty conservative fund.
It sounds like we are in similar positions, I'm 23 and finishing my MBA in December. The earlier you start thinking about savings and retirement the better. It won't make a big difference now, but it will in 30 years.
It sounds like you are going about this the right way, as you have paid off all your debt before worrying about investing.

Also, saving $50 by removing liability insurance isn't worth it when you plow into someone and they sue the pants off you. Insurance payments suck until you need them.

josh7owens

thanks man, I'll look into it.