I’m 22 years old, in the military and make 2,753 a month after taxes, including BAH. I’m in the process of saving 1500 a month for the next year for a downpayment on a house. At the same time, I’d like to begin investing. I’m wondering, since I’m young, if I should begin investing in mutual funds that I can cash out in 15 years after I pay off my first house or if I should just put my money (planning on 15% of monthly income) into a Roth IRA, so I’ll have a good retirement fund? Or should I split my 15% between a Roth IRA and a mutual fund that I could cash out without penalty before retirement?
I was thinking of cashing out a PORTION of my Roth IRA at 60 and just cashing out enough to live off of every few years after that. The other mutual fund I was wanting to cash out in 10 – 20 years for a bigger house.
I was thinking of cashing out a PORTION of my Roth IRA at 60 and just cashing out enough to live off of every few years after that. The other mutual fund I was wanting to cash out in 10 – 20 years for a bigger house.
Home | Investing | Blog article: Should I invest in a Roth IRA or a mutual fund that I can cash out at any time without penalty?
Nadia S 1:04 pm on July 17, 2010
If you don’t wan’t to pay taxes, the roth IRA is the way to go. Mutual funds you do pay taxes after cashing them out.
I would do some reading on the subject and I recommend you go to Suze Orman’s website, or buy a couple of her books, she is really good about retirement and that sord of investing if you don;t know what you are doing too much.
Jim 1:04 pm on July 17, 2010
I would split it up, as long as you don’t use it for 30 years.
Don S 1:04 pm on July 17, 2010
Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan.
Go to : low-cost-stock-recommendations
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Click on the "DRIP’s" Button on the Navigation Bar
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Good Luck