Comments on: Where to Open a Roth IRA Account

By: Dave

Dave — Sun, 05 Feb 2012 03:19:57 +0000

Hi Ryan,

I’m 33 and among several of my retirement accounts is a Roth IRA with Lord Abbet. I have been contributing the max since 2003 and I feel like I’m getting nowhere. I have a current balance of about 38k. I haven’t yet made my 2011 contribution, kinda waiting for a downturn in the market but it’s been doing real well lately. If you had to speculate would you think the fees are a big reason for the accounts poor performance, do you think I should transfer this account to a fidelity, Vanguard, TRowe Price? Thanks!

By: Ryan

Ryan — Thu, 26 Jan 2012 20:05:35 +0000

Robert, the FDIC doesn't cover investments held in brokerage accounts. However, there is a program called the SIPC which plays a somewhat similar role. I recommend reading this article for more info: Are Investment Losses Covered by the SIPC?

By: Robert DeNisi

Robert DeNisi — Thu, 26 Jan 2012 17:08:21 +0000

Hi Ryan:

I currently have a traditional fixed Roth IRA with TIAA-CREF. Was wondering, since they are not FDIC insured, is my money safe in the event the company goes out of business?

Thanks,
Robert

By: Ryan

Ryan — Wed, 25 Jan 2012 13:18:22 +0000

Jack, I rolled an old 401k into an IRA at Vanguard, which you can read about here: 401k Rollover into a Vanguard IRA. The process was easy, and the Vanguard customer account representative helped me get the process started with my old 401k provider. Vanguard's customer service is excellent, and I highly recommend contacting them if you plan on rolling your 401k into an IRA. They can also help you understand which fees, if any, there might be. As a head's up: You typically must pay taxes if you are converting a traditional 401k into a Roth IRA, since 401k contributions are made with money that hasn't yet been taxed, and Roth IRAs are funded with money that has already been taxed. Since you will be moving overseas and will not have taxable income, you may be able to avoid paying taxes on the conversion. Here is another article which may be helpful: Roth IRA Conversion. That said, your situation is unique, and I'm not 100% certain how your non-taxable income will work while you are overseas. I strongly recommend speaking with a tax advisor or a financial planner before deciding exactly how to move your 401k plan. Best of luck!

By: Jack

Jack — Wed, 25 Jan 2012 03:24:29 +0000

Hey Ryan,
I am a recent college graduated 24 years old and have work at Wal-Mart as a part time associate for about 5 years now. I just receive a scholarship offer to go and teach in South Korea for 1 year. Since taken that offer, i decided to quite Wal-Mart. My questions is what is the best advice i should do with my 401K with Wal-Mart? I am thinking about putting it into a Vanguard Roth IRA account. however, my situation is that since my job oversea allowed me to be Tax exempt for the first two years while working in South Korea, I am technically wont be paying U.S or Korea tax during that time. And the money that I makes will probably be enough to cover my living and travel expense at the moment. So my other question is, can I rollover my 401K from Wal-Mart into a Roth IRA account with Vanguard and have about $4,000 dollars be put into it and just leave it there until i came back to the U.S and start working again? Will there be any minimum contribution that Vanguard required me to put in every month? and are there and fees or penalty if I don’t contribute money while I an oversea? Thanks

By: Ryan

Ryan — Fri, 23 Dec 2011 17:23:51 +0000

Ryan, I can't advise you on this particular broker, but I can tell you that sometimes you have to trust your gut. I recommend reading the following two articles, as you may find them applicable to your situation: Brokers Don't Always Have Your Interests In Mind, and Should Your Financial Advisor Have a Fiduciary Duty to You?. In these I relate some bad experiences I had with some investment advisors, and in the second one, I share how investment advisors aren't always required to act in your best interest 9in other words, they can recommend funds that make them more money, regardless of whether or not there are better funds available). As for his shaking hands or nervousness in his voice, it could be caused by a variety of reasons (such as health issues, or on the flip side, he could have been nervous about landing a new customer). I wouldn't read into that so much as I would be concerned about making the right financial decision for your future. But the bottom line is that if you aren't comfortable with him, look somewhere else.

By: Amanda

Amanda — Mon, 12 Dec 2011 18:53:47 +0000

I am a 26 year old mother of 2 young children, I just purchased my first home. I have a little bit to invest (1200) I wanted to start a Roth IRA. My question is I really do not want to do any trading and really would just check in on it maybe twice a year. Is there a specific company or plan? I read a little about the Star Fund from Vanguard and was wondering if this would be a good choice for me. I would not be able to fully find my Roth until I finished up with my schooling (another 2 years). I would make little contributions no more than 50 a month though, until I graduated.

By: Ryan

Ryan — Fri, 02 Dec 2011 03:30:11 +0000

You should be able to transfer your IRA without any problems – these major brokerage firms do it every day and in many cases will even help you fill out the paperwork. The thing to look out for is to make sure that you are classifying transfers the right way (notify your new brokerage that the IRA is in fact a transfer so they don’t count it against your current year contributions). If you have more specific questions I recommend contacting your brokerage firm as they would be able to help you regarding your specific case.