Apr 10

Question by Thomas D: How do I invest my money in a Roth IRA?
A friend told me that I should put my money in a Roth IRA for my future investments and retirement. I don’t know much about it and/or how to put my money into one but I am curious. I am a 17 year old emancipated minor in California who has a bank account already and a job.

Thanks for all the help in telling me what a Roth IRA is and how to put my money in one (if I even should) in advance.

Best answer:

Answer by brad
I had opened an ira a few years back through my local brokerage. An ira is good for gains made and not paying the regular taxes on them. good for someone looking to retire with a nestegg. If you need access to the cash or may change your mind within a few years? Don’t get one. if you take out too soon under the rules, you will be charged the taxes. I’m not sure if 17 would be eligible either?

Know better? Leave your own answer in the comments!

2 comments so far...

  • src50 Said on April 10th, 2011 at 7:02 pm:

    Your friend is wrong, or at least premature. At 17, you are not ready to fund an IRA. Get your life, education and career on track first.

  • Ace Said on April 10th, 2011 at 7:55 pm:

    I think that it is great you are thinking about your future finances and retirment. It is never too early. Just make sure that any money you put in an investment is disposable cash, meaning you are willing to live without it.

    I think your friend is right. The sooner you start, the better because the money compounds over time. Basically, a Roth IRA is a tax deferred earning account. You can open an IRA account any where. It just depends where you want to invest it in. For example, I use my IRA to invest in stocks. So I open the account with E-trade to buy shares of the company I am interested in.

    You can use your IRA money in CD’s, Bonds, Mutual Funds, or whatever you want. Just know you are capped at the limit of $ 5K this year.

    Good luck

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