College Student Trying to Make the Right Decisions

[Guest akawej]

I'll be graduating from college in December, and I already have a Roth IRA. It was opened for me several years ago by my boyfriend's parents, and last year I made my first contributions of my own.

Since I will soon be making more money and have more to save, I want to make sure I am educated about my investments. Are there limits as to how much I can invest or how much I should invest? What do I need to know as far as the IRS is concerned?

If you can point me to some kind of tutorial or IRA FAQ, that would be great. I don't even know where to start looking, and this seems like a very confusing topic...maybe I'm making more of it than I should.

Thanks for you help.

Emily

[John G]

Almost all custodians have pamphlets and brochures for novice investors and folks who are just getting started with IRAs. You will also find many of the brokerage houses and mutual funds will have some of this information on their web site. Other good sources for beginners include: Kiplinger Finance, Money and Worth magazines. A subscription to Kiplinger may be the best choice for you because they cover the intro career (buying a house, credit, IRAs, etc.) issues better.The March issue of Consumer Reports does a good job boiling down the basic facts and giving a short list of good mutual funds. Your local library will also have a wide range of books on investing that will cover IRAs.

The maximum you can contribute to a Roth or regular IRA this year is $3,000, assuming that you have atleast that amount in "earned income". You will find that many employers have 401k, 403b or other retirement program that may be very good. Often you have more than one option to consider and may want to do more than one or some combination of options.

You may want to pick up a copy of the IRS Publication 590 which covers various IRA programs. Another source of info is the sister site: www.rothira.com which has articles on various Roth/IRA issues.

Sounds like your boy friends parents did you a great favor by getting you to think about an IRA account at an early age. You have about a 10 year start of many of your classmates.

I am curious about where you have deposited your IRA funds. Hopefully you have a broadly based stock fund that will over the long haul give you a good return. Post again if you have other questions.