FRUSTRATING-help! How about the basics???

[Guest sarkey]

How FRUSTRATING!! I have only a 401k, never had an IRA so my question will probably seem very simple. However, I must say that I have looked at many websites and skimmed countless books at Barnes&Noble and NEVER saw this simple issue even mentioned: When I start my Roth IRA, what type of investment options will I have with that money?? Obviously the choices will vary depending on who I go with to manage the IRA but I mean generally, are stocks even an option? Would I be able to buy and sell stocks with my Roth like I do with my internet stock acct? And or mutual funds? In trying to find an answer to this simple question, I have learned volumes on conversions/withdraws/penalties, etc etc (and in the process also found this great website). That's nice but how about a little on the basics for crying out loud! MANY thanks to whoever is able to provide an answer to what should be much easier to learn!!

[bzorc]

Your investment choices, in my opinion, are pretty much what is allowed for regular IRA's. You should be able to go to a bank, brokerage company, insurance company, etc. and set up what you are looking for. These folks know what is allowed and not allowed as investments, and should be able to get you on your way with your Roth!

Hope this helps.

[Michael Devault]

As BZORC points out, your investment choices are identical to those available for traditional IRAs. And, his advice about going to a bank, brokerage company or insurance company is sound, since all of these institutions generally offer Roth IRAs.

If you're interested in equities, keep in mind that a Roth IRA has to be in what's called a "custodial account." As such, the vendor (say a brokerage company) establishes an account that you participate in, but you are not the actual "owner" of the funds... the custodian controls the funds. If you want to move money from one fund to another within the same family of funds, you instruct the custodian to do so... you don't make the transfer yourself. Some brokerage firms have some restrictions on which funds can be used in a Roth or traditional IRA. You can get lots of material from some of their web sites.

Hope this is of some benefit to you. Good luck!

[John G]

Sarkey, when you just have your initial $2000 in a Roth IRA you have practical limitations on what kinds of investments. In my opinion, you logical choice is a mutual fund.

Please read string of comments on 2-16 for Jeffrey M "Help, I guess it is time for me...." I covered a number of issues in that prior post.

[Guest sarkey]

Thanks for your help guys!

[Alf]

F.Y.I. - I established my Roths at an online brokerage firm. It was as easy as opening any account and I have been very pleased.

[Guest daveh]

Thanks for the overview of the "basics"...I'm on my way to begin.

Just 1 question: What's my deadline for opening a Roth IRA for 1999 (have not filed yet).

thanks

[BPickerCPA]

4/17/2000 is the deadline for 1999 Roth contributions, even if you have already filed.

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Barry Picker, CPA/PFS, CFP

New York, NY

[John G]

Barry, we need to remind people that as you get close to the April tax filing, the IRA departments get flooded. It is always useful to get an early start, avoid the lines and waits.

Plus, check the statements that custodians provide to ensure the right deposit and your deposit is is tagged for the right tax year. During the IRA rush, lots of mistakes get made.

[This message has been edited by John G (edited 03-06-2000).]