The first thing that should be on everyone’s mind once you decide that a Roth IRA is right for you is to understand what type would be best suited to you personality and situation. To that end, this post will be dedicated to finding out what things you should consider when trying to find the best Roth IRA for you. B efore we get into the nitty gritty, though, let’s just be sure that everyone gets the concept that a Roth IRA can be just about any investment vehicle available in a regular account. The fact that it is in a Roth IRA just means that the earnings cannot be withdrawn until after age 59 1/2 unless you are willing to pay a penalty. So really, this will focus on what type of account is best for your outlook on investing.
So really you must consider what type of investor you are. Are you a set it and forget it type of investor? Meaning are you willing to put your money in one lump sum or monthly, put all of it in a series of funds or similar and not worry about it until it is time to retire? If that is the case (and it seems to be that way with many investors) then you are likely best off trying to find a mutual fund company that fits your personality and investment style. The one thing I would caution you on here is to select a company that has a reasonable (meaning low!) fee schedule and a no load up front charge. Fees can eat up your nest egg faster than you really consider. Great companies exist that have many fund options and no load up front with acceptable fees. I would suggest you look at companies like Vanguard, T Rowe Price, Fidelity, Janus among others. The beauty of these companies is that you can set up an account with them, set up a monthly investment amount and have it purchase shares in the mutual fund of your choice.
Or perhaps you don’t want to be a part of the mutual fund game, you can always go the route of a CD (certificate of deposit) or money market account. These can be set up just about anywhere from your local bank, to a national bank, to a discount broker (such as TD Ameritrade, Scott Trade, E Trade, Charles Schwab, or similar), to an internet bank. The possibilities are almost endless. The key point being that you can also invest your Roth IRA into something very safe and stable.
Now, for those that are a bit more adventerous or well versed in the investing game you can also go with a Roth IRA account that will trade stocks, bonds, ETF (Exchange Traded Funds), options, covered calls, cash secured puts, and so forth. This is a very powerful tool for those that are so inclined as it allows for impressive growth to occur outside the sticky fingers of the IRS tax man. If you are able to trade your way into impressive profits, sure you won’t have access to them until you are 59 1/2 or older, but then all your hard work will c0me out tax free. That is an important point for those that enjoy or relish handling their own retirement investment.
So given the above, what is the best Roth IRA for your situation?
