22 years old, should I start an IRA?

[Cubicle]

I am a college student that doesn't work. I average about 5k/month in poker right now and I am looking to start investing. Can I set up an IRA? If so, what online brokerages do you suggest for this? I am really looking to save up for my first house. I can withdraw from an IRA for this purpose right?

Any other investing tools you think I should look into?

Thanks so much in advance.

[squiffy]

You should invest early and often. Starting an IRA ASAP is generally a good idea, if you can afford to keep the money invested until age 59.5. Generally, if you withdraw early you pay the tax, plus a hefty 10% penalty.

There are exceptions for education and first time homeownership, but I don't fully understand how they work.

http://www.bankrate.com/yho/itax/tips/20030410a1.asp

Actually, your parents should have started an IRA for you 20 years ago. But why cry over spilled milk?

[captZEEbo]

you have to file as a pro to be able to open an ira (earned income problem). I'd recommend a SEP-IRA.

Here's the early withdrawal info about SEP-IRAs and I think they're pretty much the same for most other IRAs
http://www.investopedia.com/universi...ra/sepira3.asp

You can only take out up to 10k for your first downpayment on a house. If you've got extra money, this is an excellent way to save for your house b/c of tax benefits.


However: I think you can also file as a full-time student who has gambling income as a hobby. It might end up being more +EV to invest this money outside of an IRA but stay in the unemployed full time student with hobby income. When you file as a pro you are subject to some extra taxes like social security which eat up a lot, but you're also entitled to tax writeoffs (new computer, travel to casino, etc).

[ebranig]

[ QUOTE ]
Actually, your parents should have started an IRA for you 20 years ago. But why cry over spilled milk?

[/ QUOTE ]

You need to have earned income to start an IRA. I don't think OP had earned income at age 2.

For OP: check with a CPA. Whether you can set up an IRA depends on how you pay your taxes (recreational/professional). Making 5k/month, going to a CPA is a no-brainer. Spend the money.

[squiffy]

You're right. I was thinking about an educational IRA. But they are not true IRA's apparently.

https://www.theeducationplan.com/lea...mparison.shtml

[Cubicle]

If I am not employed, what other tools do I have? Anything other just opening up a brokerage account and throwing some money in funds?

[gull]

[ QUOTE ]
You should invest early and often. Starting an IRA ASAP is generally a good idea, if you can afford to keep the money invested until age 59.5. Generally, if you withdraw early you pay the tax, plus a hefty 10% penalty.

There are exceptions for education and first time homeownership, but I don't fully understand how they work.


[/ QUOTE ]

Actually, you can withdraw contributions (but not earnings) penalty-free from a Roth IRA.

[Thremp]

File as a pro and contribute?

[GeorgeF]

Your poker earnings could dry up because:
1) You were actually depending more on luck than you thought.
2) The people whose money you are taking run out of it leaving you and people as good or better than you to "shoot it out".
3) Poker is hot today with people feeling giddy, it may not be tomorrow, especially if housing collapses.

I suggest you invest in your self. Perhaps use your winnings to learn a foreign language or obtain professional skills.

An IRA might be useful as if you start losing, you cannot withdraw the $ without a penalty.