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#1
05-30-2007, 09:47 PM
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Roth IRA
I put 4000 in a Roth IRA about a year ago. I invested in the stocks such as JP Morgan, Chevron, Pepsi, General Dynamics, and took a shot with Sirius to see if Howard could propel them.
Anyway, I'm 23 years old and bringing in decent income and am wondering how much I should be putting into this Roth a month. I also have a 401k through work which matches up to 8%, which isn't bad for what I hear. Anyway, what should I be doing to ensure in 20 to 30 years I have a nice nestegg to retire to, any suggestions? Also, over the year, the 4k I invested turned into 4400, is that a good gain? I did not change one stock or anything over the year that was just how it grew. Any ideas/suggestions are appreciated. 
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#2
05-30-2007, 09:54 PM
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Re: Roth IRA
First off, you should be depositing as much into your 401(k) as it takes to get the max match, otherwise you're just throwing away free money. Once you've done that, put as much into the Roth as you're comfortable investing, up to the limit.
10% in a year isn't half bad.
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#3
05-30-2007, 10:30 PM
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Re: Roth IRA
First, you need to get the maximum match on your 401k at work. Then, you need to make sure that the equivalent of about 15-20% of your gross income gets put away for your retirement. For example, if you company matches dollar for dollar up to 8%, then you've got 16% going in and you're doing ok. (The 15-20% is a rule of thumb I've heard a few places to be able to retire at 60ish with the same income you had while you were working.)
Finally, get some personal finance books and read all you can.
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#4
05-30-2007, 11:49 PM
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Re: Roth IRA
[ QUOTE ]
First off, you should be depositing as much into your 401(k) as it takes to get the max match, otherwise you're just throwing away free money. Once you've done that, put as much into the Roth as you're comfortable investing, up to the limit. 10% in a year isn't half bad. [/ QUOTE ] 10% in a year isn't half bad...when NOT picking stocks would have lost a ton of money. but when the market does way better than your picking, the strategy doesn't look so good. i don't know why you'd want to try to pick individual stocks rather than a wide index unless you have some seriously good reason. Barron
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#5
05-30-2007, 11:54 PM
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Re: Roth IRA
If you have the means to do so, you should be putting $333.33 into your Roth each month and $1,250 into you 401k so you max out your Roth at $4000 and 401k at $15,000 each year. Maxing out your 401k may seem like a stretch, but consider what this money would be worth after taxes and it shouldnt be too hard to swallow. If you can't max out your 401k at 15k, take full advanatge of your companies 401k match and then max out your Roth and any left over money should then be put into your 401k even though it is unmatched.
This may seem like overkill to some, but if you are able to max out your Roth and 401k you will be in plenty good shape down the road. It is easier to start stocking away cash when young and single then when married with kids. Stocking away as much as you can early in life means you can enjoy the benefits of compounding. You can always cut back your 401k contributions if you get in a pinch.
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#6
05-30-2007, 11:59 PM
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Re: Roth IRA
[ QUOTE ]
i don't know why you'd want to try to pick individual stocks rather than a wide index unless you have some seriously good reason. [/ QUOTE ] I agree. OP, I dont know who your account is with but make sure fees arnt eating you alive when buying stocks. With such small positions in a bunch of different stocks the fees can quickly add up.
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#9
05-31-2007, 09:10 AM
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Re: Roth IRA
[ QUOTE ]
I agree. OP, I dont know who your account is with but make sure fees arnt eating you alive when buying stocks. With such small positions in a bunch of different stocks the fees can quickly add up. [/ QUOTE ] My account is with scottrade, There are fees to buy the stock originally (I think it's like 6 bucks a trade or something) but I don't trade on a daily basis. I bought the companies I listed in the original post all at once, so I think the fees were like 30 bucks or something. I did not buy or sell any stock over the last year so there were no extra fees. I was trying to just buy solid stocks that I could rely on to grow over the long haul. It sounds like I should really be putting more into my 401k.
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