Apr 16

Question by what?: I am a college student, can I open roth IRA and start contributing?
I am a dependent in my twenties, studing in a community college. I am employed as a tutor in my CC. Can I start saving for my retirement? does ROTH IRA work for me? or is there a better option?

P.S. I can contribute $ 400 each month. Is that too little to qualify for a roth IRA?

P.S. also, will participate in a roth IRA affect my status to receive financial aid from government?

Best answer:

Answer by shiprepairwoman
You can contribute up to your earned income capped at 5K,

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2 comments so far...

  • Joe Said on April 16th, 2011 at 7:13 pm:

    You can contribute to an IRA as long as you have “earned income” from some type of job and later get a W-2 or 1099-MISC (certain types) for it.

    In my opinion, a ROTH IRA is the best type of IRA that there is! It does not allow you to deduct it against your income each year (so you don’t immediately save on taxes), but you also DON’T pay taxes when you take money out of it in retirement!

    In 2008 you can contribute up to $ 5,000 for the year into this IRA. $ 400 per month is almost that full amount! But if you only earn, say, $ 3,000 at your job(s), then you can only put up to that same amount ($ 3,000, or whatever you earn under the $ 5,000 limit) into the IRA. In other words, you can only contribute up to how much you’ve earned for the year at your job(s).

    I have not heard that having an IRA hurts your chances to receive financial aid, but try researching and asking the financial aid people that question before opening the IRA!

    I highly recommend Vanguard (www.vanguard.com –> click on “Personal Investors”) for the investment choices to put in that IRA account (safe or riskier — either way)! They are AWESOME, and have such high-quality products — and very little or no fees!

    Hope this all helps!

  • Doctor Deth Said on April 16th, 2011 at 7:42 pm:

    You have to have taxable income and the MAX you can contribute is about $ 4000 per year

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