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[Guest ngrapno]

how do i start an ira with roth and how much can i start out with?

[John G]

You might want to use the search engine capabilities at this sight using "new investor" or "starting" as the key words. There have been a ton of posts on this subject by me and others.

In brief:

Get a copy of IRS publication 590 and keep it with your tax records.

To open a Roth you must qualify for that year, you don't need to qualify in subsequent years, only if you are trying to contribute in the subsequent year.

Qualifications are based upon a combination of "earned income" (all payroll and some other types of income qualify, but not dividends or interest), limited by adjusted growth income thresholds and 1040 filing status. For example, if you are single and have and adjusted gross income below six figures and earned income (perhaps the most common status for Roth starters) - you qualify. You may also qualify if you are married and your spouse has earned income, even if you have none. But... qualification rules are a little too complex to summarize all the possible combinations here. There are no age restrictions on a Roth. If your circumstances are odd, post the details and we will tell you about qualifying.

Roths are INDIVIDUAL accounts, not shared with a spouse.

Roths require a custodian - a bank, mutual fund or brokerage that will hold your assets. You make the custodian choice. Annual fees, convenience, range of investments, etc. are factors that might influence this choice. You can find lots of choices by searching the internet or looking under investments in your yellow pages. Contact at least three potential custodians and ask lots of questions. Most have good materials for someone just getting started.

People new to investing probably should be selecting a mutual fund or funds for their assets. An index fund or a general stock fund is often a good choice, but this depends a lot on your investment experience, age, risk tolerance, etc. There has been a lot written here on this topic which you can find by searching "index", "noload" or "mutual funds". {Noload means a mutual fund that does not charge a commission on the way in or out} If you don't find anything that seems to answer your questions, post again.

Amounts? The max is $3,000 or your earned income, which ever is lower.... but if you are over 50 the max is boosted to $3,500. Maximum amounts are scheduled to change in future years so in 2005 you need to check again.