Opening a Roth
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I’ll be opening a Roth IRA soon, hopefully this month. But I’m struggling to figure out where to open it, and what I should be aware of when doing so. I was leaning toward going with Vanguard until I found out that they have a $3000 minimum to open one. I do have $3000 that I could use to open one, but I’d really like to break it up so that I invest around $400 each month instead. (To sort of spread things out.) So, I just don’t know. If you’ve opened a Roth, what has your experience been like? Any recommendations or things to avoid?
January 28th, 2008 at 12:41 pm
Hey there, congrats on putting forth the initiative to open a Roth, it’s a great decision and will make your retirement that much more flexible (and rewarding!).
Anyway, I’m currently opening a Roth with Vanguard and transferring most of my assets into it from Scottrade. Here are my thoughts:
I am very happy with Scottrade. They have a decent selection of no load funds (I went with Dreyfus index funds: Mid, S&P, Small, and International) and if you want to throw a stock in there, those are cheap ($8 a trade). The only dowside is that the Dreyfus funds were a little pricy compared to Vanguard. The Dreyfus Index funds were all 0.5% compared to Vanguard’s (which are mostly around .2%).
This is why I’m switching to Vanguard. But the reason I’m leaving my Scottrade account open is to handle my stock (one B share of Berkshire Hathaway). If I want to have a stock in my Vanguard Roth I’d have to pay way more than I want.
So my advice to you is go ahead and open a Roth with Scottrade (or another low-cost company) and put your money into the market gradually (which I commend you for, dollar-cost averaging is a great idea). Then, when you’re ready and you can transfer over to Vanguard without messing up your allocation (that $3,000 minimum is what made me wait a couple years until I could buy all the funds I want), do it. And if you have stocks you don’t want to sell, keep your old Roth too.
Good luck!
January 30th, 2008 at 10:42 am
USAA is a military bank but they will open ROTH IRA’s for anyone. I opened one a few years ago. If you put yourself on automatic investing you can open one for as little as 50 bucks a month. No fees, some good funds, I love them!
January 30th, 2008 at 11:34 am
Calvert is a great low cost option for opening a Roth. They have super low fees
and a minimum of $1000 (maybe less if you commit to $X/month). The only
possible drawback is that it’s sometimes hard to get someone to talk to at
customer service — but now that I figured out how to manage it entirely online…
that’s no longer a problem.
February 4th, 2008 at 6:23 pm
congratulations on the move! good job! you really can’t go wrong with vanguard, but if you are inclined to break it up, i would suggest t rowe price. they are typically the main opponent in the online ira opinion wars against vanguard. they have competitive fees, a large number of 4 and 5 star funds (although do your research, after all it is only a ‘rating’) and one can start a ira in one fund for as little as 50.00 / month if one uses their automatic investment plan. the one caveat is that there is a 10.00 fee per fund per year that has less than 3,000 (i think, but i could be off on this one) in total assets. now, if you invest the 3,000 you may not have to deal with this, but when you talk to an associate you can get the full details regarding that issue. i have found their customer service to be excellent, but that would also be something you would want to reserach on your own. good luck, and let me know if you have any further questions.