Starting ira
My son is 26 years old with no 401k at work.his company gave him a plan illinois secure choice wich is a roth ira.My question is wether he should start his own ira in a brkerage account like td ameritrade or fidelity,and should it be a roth or traditional.He makes 45,000 a year right know and has 55,000 in a bank account
Terry Says
While I applaud the State of Illinois for trying to make retirement savings plans available to everyone, I would suggest your son go directly to Fidelity or Vanguard and open a Roth IRA For 2019, if he is single and earning less than $122,000 he can contribute $6,000. And he has another two weeks to make a contribution for 2018 — up to $5500 if his income was below $120,000 for 2018. I recommend the Roth IRA, but if his income is too high to qualify and he isn’t covered at work, he can have a traditional deductible IRA.
He can choose an S&P 500 fund, which tracks the board market index. Or an “equity/income” fund which is a bit more conservative. Probably the best move would be to contribut3e no for 2018 — and then set up an automatic monthly contribution during the coming year, so he never picks the “top” of the market to invest. Just get started!
