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Roth IRA Decision

August 5th, 2014 at 04:17 am

A few days ago my mother sent me an article from the New York Times (I believe) about how you should open a Roth IRA as young and as soon as possible. Since then she's been really pushing me to do research on it and strongly consider opening one. I have, but the whole world of investing money and retirement accounts truly baffles me.

I'm 21 and have only ever had part-time and summer jobs. I currently have only a few expenses, although once I graduate college this year I'll have about $20,000 in student loan debt. I have no credit card debt and plan on keeping it that way. My savings account is low, mostly because I'm still recovering from my study abroad trip, but nearly all of it will go towards utilities and groceries and school expenses this coming year--my parents are awesome and will pay my rent and public transport pass. I don't have an emergency fund, but I am lucky enough to have a family that will help me out in case of a true emergency.

I already know I won't be able to max out my contributions, so my goal would be at least $1000 for this year. From the research I've done, Sharebuilder allows you to open with any amount but tends to have more fees, while Vanguard has a $1000 minimum but is better on the fees front.

I would love some input on this, since I know many of you have Roths. Is it worth it for me to open one at all? Would the no-minimum Sharebuilder be a good starting point until I get the hang of this stuff, or should I save up the rest of this year to open the Vanguard? Anything I'm totally neglecting to consider?