Retirement Accounts???

[kdibattista]

Ok... DH has a retirement account through his work that he contributes to every paycheck and has quite bit so far (he's 36). My work is part time and therefore I don't have a retirement account set up (I'm 29). I want to start an account for myself and I am leaning towards a Roth IRA but I'm really clueless about these. Are there any experts here who could recommend a "starter" retirement account? I would be looking to contribute $100 - $200 a month, increasing that amount next year.

Thanks in advance!!!

P.S. Also, are there any calculators that can give me an idea of how much money we would retire with by putting xxx dollars away each month?

 

[disneysteve]

First, let me suggest moving this discussion over to the budget board. That's where a lot of us financial-types hang out.

Second, congratulations on taking initiative and doing this. You'll thank yourself later.

Now, to answer your question... A Roth IRA is probably your best choice as long as you meet the income guidelines which I believe are $160,000 for couples filing jointly. You get no tax deduction for contributions but you money grows tax free and is tax free when you withdraw it in retirement.

As to what to invest that money in, I can't really answer that one for you. It depends on a lot of factors such as what your other monies are invested in, your risk tolerance, your growth goals, etc. Kiplinger's Personal Finance magazine has an excellent series of articles this month on retirement. You might want to pick up a copy of that and read those articles for some good guidance.

I will recommend that you stick with a large no-load fund company like Vanguard, Fidelity or T. Rowe Price.

As for calculators, there are plenty of them online. Go to www.money.com or www.bankrate.com for some good ones. Just as an example, $100/month in a tax-free account earning 7% for 35 years will grow to $180,105.46.

Good luck.

 

[kdibattista]

I just posted on the Budget Board as well... thanks Steve!!!

 

[mickeyfan2]

If your husband has a 401K at work then your IRA cannot be tax deductible.

 

[kdibattista]

If your husband has a 401K at work then your IRA cannot be tax deductible.

He actually has a 401a... not sure if that makes a difference. I was looking at the Roth IRA, which is not deductible anyway... I think

Thanks!!!

 

[disneysteve]

I was looking at the Roth IRA, which is not deductible anyway... I think

That's correct.

 

[Dan Murphy]

If your husband has a 401K at work then your IRA cannot be tax deductible.

Not necessarily true, deductibility of IRA is dependent on joint filed AGI. Though immaterial in this case as OP wants Roth, a good idea.

(not to be taken as tax or investment advice)