Anyone know much about TRPrice Roth-the $50 monthly debit one? Info pl

[Guest tomeki28]

Hi

I sent away for info on T. Rowe Price's Roth IRA, and they sent me info that states I can have my checking account debited @$50 a month. Is this a good plan/company? I don't make a whole lot so I must do this as wise as possible.

Thanks!

[John G]

1. T Rowe is a decent mutual fund company that has lots of no-load choices.

2. The plan you are probably talking about is the monthly direct deposit option. This is essentially a dollar cost average method of funding your IRA. Plus side: you buy a fixed amount each month so you buy more shares on a down month automatically and buy less on a high month. Some custodians will waive the annual fees or reduce the initial deposit amount for anyone electing a regular direct deposit. Negative side: you can get a longer amount of time in the tax shelter by putting all money in early January.

3. As someone just getting started, I would recommend that you pick a very general fund with a broad array of stocks. Avoid the highly specialized funds. An index fund is especially attractive because the internal annual expenses take less of a bite out of performance.

Good luck