Tue 30 Jan 2007
I’ve been way too complacent with my Roth-IRA. When that sucker originally opened way back when I was 21 (way, way back), the interest rate was pretty decent, and I’ve maxed out my contribution every year. Now, it’s at a pittily 0.50%. I mean, come on. If I withdrew all the money in that account and had it sitting at home in cash, I’d earn more value in collected dust on the surface areas of the bills than I’m earning at the bank.
So here’s where I need help — does anyone know whether I can simply transfer the funds in a Roth-IRA into another, better, more lucrative Roth-IRA? And if I can roll it over that way, does anyone know of a good Roth-IRA for me to roll my current pittily one into?
I’ve been lazy about being robbed on the Roth-IRA deal, but seeing the statement now is making me more salty than ever. I mean, I’d earn 5% more interest if I stopped contributing to the current Roth-IRA and put the same moneys into my Emigrant Savings Account. That’s not right!
do you mean your 401k? you should be able to invest your 401k in a variety of ways, not simply a fixed-interest savings account. but you have to see what options your employer offers. generally, they will have an aggressive fund, conservation, medium-risk, fixed interest, etc.
Nope, I mean my Roth-IRA. My 401K IS invested aggressively; 50% S&P 500 Flagship companies, 40% medium-DIA companies, 10% stable fund. And that’s more than maxed out so I get full employer match. I’m concerned about the lameness of my Roth-IRA and I’m bitter than if I max it out again this year, that’s $4K into something that only yields HALF a percent of interest, and that’s just LAME. I have better things to do with the money.
well, same with Roth-IRA. there are a variety ways to invest it, just like your 401k? whoever manages your Roth-IRA (Schwab, Merril?) would have at least as many options as your 401k provider, and most likely a lot more options. at your age, you should not be investing in fixed-interest accounts.
Unfortunately, my Roth-IRA is with my credit union, so they probably don’t have the variety. That’s why I need to figure out whether I can roll it out of the credit union and into a good investment fund. I don’t even want to contribute for the 2006 tax year for the low interest, cuz if I put that money into other places, it’d have a higher return.
The benefit to the Roth is that when I withdraw it at age 59.5, it’ll come out tax-free, unlike a traditional IRA. But if I start dumping the same amount of investment into my savings, I’d get taxed on the interest, sure, but what’s left in interest after taxes is even higher than what I’m getting from the Roth, AND I can withdraw that tax-free, too, and I don’t have to wait till I’m 59.5 years old. I’m starting to lose the motivation to maintain a Roth at all.
I believe you can open another IRA account with either another bank or fiancial inst. (Hartford, T. Rowe Price, etc) and open an account a roll it over. Do you have an EPA at work? If so, you can call them and talk to a professional for free. Normally, you get 3-5 session per incident. If you can do it with a 401k, then I am sure you can do it with IRA.
Vanessa, you were right. I looked into that with TD Ameritrade, called them and asked. I’m gonna open another Roth-IRA with them, like you said, put my $4K in for 2006 with them, then roll over the other Roth-IRA into the new TD Ameritrade one. And, consistent with what Diana suggested, which I agree with, I’m gonna put the TD one in a very aggressive investment portfolio and get a higher return. A few years ago the return was almost 30%. Much better than 0.5%.
AND I also booked my China trip. AND I worked out. What a productive lunch!
I used to have a Roth IRA because my previous company went bankrupt and I had to roll my 401k over because I didn’t meet the min, but cashed out later and thought I wouldn’t invest or do major, long term investing until after 2012 becasue my thought is why invest when the Mayan’s think the world will end/shift. So I am waiting until after that to do any major investing. Call me superstitious…I know! But that’s what I feel safer doing.
Unless you’re spending it all now before 2012 to prepare for death, the fact that you’re keeping it to invest after 2012 is no more strategic than you investing it now. Cuz if you die in 2012, you’re not gonna enjoy the money anyway, and if you live past 2012, you would’ve lost out on A LOT of interest to enjoy later on. So if you’re not blowing the cash for the next 5 years, what’s the difference?
Yea I think TD Ameritrade has a decent IRA you should be able to get into.
Call Suzie Orman–she knows all that kind of stuff. I read her book several years ago on that sort of thing but I didn’t memorize it. I just remember it talking about what you could do when you already had $$ invested. Good luck! And if you need someone to SPEND the money for you as a tax write-off….give me a shout!
James – I tried to sign up for an account online but I think it led me down the wrong path. I suddenly was signing up for a whole different type of account. I’ll try again today.
Flat Coke – Thanks for your generous offer! I will never forget it. The next time I’m rolling in money and getting irritated from all the damn papercuts, I will turn to you to get rid of the dough for me.
i really like fidelity investments- their fees are low. they are not obvious cuz they are mostly “rolled” into the mutual fund prices, but if you look closely, and compare to other firms, fidelity is quite good.
There’s no fee for a TD Ameritrade Roth-IRA or for the transfer from my old Roth to the new one, IF I manage my own stocks. But if I want a portfolio to be assembled for me based on annual assessments of my risk tolerance and long-term goals, which is automatically updated to respond to market fluctuations, then it’s .50% of the money in the account. I think that’s very reasonable, cuz I do not want to regularly research and keep up with current market trends.
I still will invest in stuff like a home or short term investments, but nothing for the long haul, until afterwards. I know it sounds silly, but that’s what I feel more comfortable doing. Darn these supersticous behaviors
Ultimately, it’s all about your personal happiness.
True. Now if nothing happens after 2012 let’s pretent that this conversation never happen :0)
Oh, of course not. The internet is a very secure place. *cough*