How do I set up a Roth Ira? I want to do it through Fidelity, I need some advice, what to invest in, other advice? Let me know

 

  • jpocia03 9:05 am on March 7, 2010

    Here is the answer.

    There are two most commonly used IRA’s.

    Traditional IRA:
    This account is an account that allows a majority of investments to be used. This account uses pre-tax dollars, and might provide a small current tax deduction. At the time of withdrawing your monies you will be paying tax, at your current tax rate. This is considered a tax deferred account.

    ROTH IRA:
    Similiar to the Traditional, this account can also have a wide variety of investments placed within. The major difference is that you are using after-tax monies, and at the time of disbursement, you will not be taxed at all.

    Now the bigger question is the types of mutual fund companies that are out there. Granted Fidelity is a well known and respected financial company. This is considered a LOADED fund company, because you pay an initial commission to the company at the time of mutual fund purchase. There are several different classes of shares you can invest in.

    A share: Larger intial commission fee, but lower management fees.

    B share: This is considered similiar to annuities, which are high management fees. There is also a vesting schedule, the longer you hold onto them the lower the fees are, and it will eventually consolidate into an A share.

    C shares: This is I believe 1% up front and 1% added to the management fees.

    You can research possible NO-LOAD companies. A well known company that is NO-LOAD would be Vanguard. However, no load companies have extremely low management fees, they are limited in the amount of investment advise they will provide.

    Hope this answers your question.

  • Yardbird 9:05 am on March 7, 2010

    That’s easy. Just go to the website and fill out the forms online. Choose a mutual fund for your money.

  • src50 9:05 am on March 7, 2010

    See the Fidelity website – it has all the info. If you don’t know anything about mutual funds, pick the target retirement date fund appropriate for your situation (you can always move to other funds later, should you choose).