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Originally Posted by bmwxdrive
I have a question about an IRA Roth I want to open. I am 20 years of age and I work as an intern as well as a full time college student. I was wondering if it matters which provider I open an IRA Roth account with (eg. www.fidelity.com , www.scottrade.com , etc.....).
I was also thinking of investing in a Vanguard® 500 Index Fund.
I am not sure which one to invest in because I do not have enough money for both. I also pay for my college and need to save money on the side for that. I am not sure if I should invest a retirement account or a short-term five year plan with Vanguard. I was leaning toward an IRA Roth account. Any advice would be greatly appreciated.  |
I would highly recommend contributing to a Roth IRA. I personally have maxed my Roth IRA since they became available in 1998(?).There are not necessarily any tangible benefits of using one broker over the other. However, if you want to invest in the Vanguard 500 index fund, you may want to use Vanguard b/c if you purchase the Vanguard fund through Fidelity, for example, you will be charged a transaction fee b/c it's not in their network of non-transaction fee funds. I personally use Fidelity but Vanguard is also a very good choice.
You said that you can't afford both...I'm a bit confused. Do you mean you can't afford a Roth IRA and to invest in the Vanguard fund?
The Roth IRA is simply a investment tool. You can use it to invest in stocks, mutual funds, bonds, etc. So, you can use it to invest in the Vanguard fund. If you need money for college, I would invest that money in a money market fund. My Fidelity MM is currenty paying 5%. You may also want to invest in a short term CD.
bd