Investing/retirement planning?

[nator]

I was wondering what advice some of you older guys on here have for someone who wants to start investing for their future and retirement. From everything I have read Roth IRA's is the way to go with my retirement account. I am looking at starting up a Roth with one of the big names either Merrill Lynch, T.Rowe etc. I would also like to do some small investing in other areas but am new to the game. Up until this point I have invested the Amish way, a penny saved is a penny earned. I am looking for suggestions for investments to research and if you have had great success with anything I would like to hear about that as well. Thanks for any feedback.

[RageBlanket]

Does your work offer a 401k?

[mentalflex]

If you are not super savvy and want to simply your allocations and have them adjust to your risk preferences and life stage, then a life cycle fund is a good option. They adjust over time, for example as you move closer towards retirement the fund changes its allocation to less risky investments. They are also well diversified. T-Rowe Price has the lowest fees for these types of funds and I have my Roth IRA invested in one.

Over the long run, you will not beat the market index, especially when adjusted for fees. Therefore I would recommend an index fund because it does not require active management and all it does is track the index. S & P 500 Index funds are generally a good bet.

IMO, I think these are your best starting points and as you become more familiar with the markets you can decide where you would like invest additional money.

All through undergrad I worked in the financial services industry as a licensed advisor (not stocks, only mutual funds) and insurance agent, so I have a decent background on mutual funds.

[nator]

If you are not super savvy and want to simply your allocations and have them adjust to your risk preferences and life stage, then a life cycle fund is a good option. They adjust over time, for example as you move closer towards retirement the fund changes its allocation to less risky investments. They are also well diversified. T-Rowe Price has the lowest fees for these types of funds and I have my Roth IRA invested in one.

Over the long run, you will not beat the market index, especially when adjusted for fees. Therefore I would recommend an index fund because it does not require active management and all it does is track the index. S & P 500 Index funds are generally a good bet.

IMO, I think these are your best starting points and as you become more familiar with the markets you can decide where you would like invest additional money.

All through undergrad I worked in the financial services industry as a licensed advisor (not stocks, only mutual funds) and insurance agent, so I have a decent background on mutual funds.

Thanks for the advice. I am looking to max my IRA out every year and keep that Low Risk aka "set it and forget it", then any other money I can spare put into areas that might generate a little extra income for the short term.

[nator]

Does your work offer a 401k?

I wish, I get some good job perks, but 401k is not one of them.

[mentalflex]

Nator, here is the link to the T-Rowe Roth IRA Page: http://individual.troweprice.com/pub...c=RothTradTool and http://individual.troweprice.com/pub...tChoice-IRA(SM)

Check it out and explore some of your options. You may want to consider the Retirement 2050 fund or Retirement 2045 fund. I'm just partial to T-Rowe because they hold all of my investments and I am very happy with their performance and customer service. I have the 2050 Fund, which is a 4 star Gold Rated fund by Morningstar (can't go wrong wit that one IMO). Set an automatic deposit every month and you are set. I dump more $$ into it when the share price is low because I know some time down the road it is going to go up and I'll make a profit on all those shares I bought dirt cheap

Other companies I would consider:
Fidelity -> In general their funds tend to be invested with a slightly riskier allocation than T-Rowe
Vanguard -> For the most part they invest a little more conservative than T-Rowe

With any managed fund, check the fees. Even if a fund is more profitable, it may have higher fees so you'll have to do the math to see if the extra fees are worth it.

[Heckman]

Thanks for the advice. I am looking to max my IRA out every year and keep that Low Risk aka "set it and forget it", then any other money I can spare put into areas that might generate a little extra income for the short term.

Thats where my wife and I have put ours. Hers is in a Roth IRA and mine is in a SEP IRA...When we younger we were in several high risk investments..they paid off and we've since gotten away from anything with risk. IMO you can't go wrong maxing out your IRA.

Some companies offer different investment plans, but if yours doesn't mentalflex has offered some pretty decent advice.

[nator]

Do you guys think it is better to add money through out the year Ex. $416/month for the entire year, or to plunk down $5000 to max it out on the first of every year and let it work all year long?

[mentalflex]

Do you guys think it is better to add money through out the year Ex. $416/month for the entire year, or to plunk down $5000 to max it out on the first of every year and let it work all year long?

You have to consider the underlying fund that your IRA will be invested in. Markets go through cycles and if you buy all at onces you won't be able to take advantage of buying when share prices are lower. So if your are investing in something completely low risk like T-Bill fund or bond fund, interest will accrue over the entire year, thus making it a better option to dump it all in at once.

With riskier investments, IMO, the better option is to invest monthly with a set deposit and then when the market reaches a downswing buy up more shares of your fund. This will generate more interest income for you.

When you think you are set on a fund, I would call up an advisor at the company and ask them their opinion, because they are the ones who have greater insight into the management and diversification of the fund and overall risk profile.

[steel1970]

I don't know about 401k's at this point. Most companies that I know of are not matching much anymore, and I would be a bit unsure about someone else playing with my money. The IRA's seem like a great way to go, that is low risk, so no worrying. I have ALOT of friends who had big money in 401k's, and to say that they ALL lost ALOT would be a huge understatement. Some are basically starting over. One friend lost over 100k in a few short years, even after changing his risk factors. I think the market for them has played itself out. We all know how unscrupulous the market traders can be. It's just not a sure shot thing anymore, and with employers doing very little or nothing in terms of matching, IMO it would be best to go with the safest alternative.....This is coming from a guy who doesn't have a whole lot ready for retirement, so take it as you want to....lol

[TLopez]

It's not gonna matter once the world implodes in December, according to the Mayan Calender. I say spend it on booze and women! :dancingna

[nator]

It's not gonna matter once the world implodes in December, according to the Mayan Calender. I say spend it on booze and women! :dancingna

As someone who studied under a well known Maya Archeologist in College I can confidently say that myth is bogus. So ill keep saving, however it does giving me an excuse to buy more guns!!!!!

[TLopez]

As someone who studied under a well known Maya Archeologist in College I can confidently say that myth is bogus. So ill keep saving, however it does giving me an excuse to buy more guns!!!!!

Yes! You can never have too many guns! I love to shoot, but the ammo is so damn expensive.

[mentalflex]

With an IRA, the risk can either be high or low, the IRA itself is not the investment, the underlying fund where you hold the IRA is where your money is going and will drive the risk and reward.

There are almost an unlimited number of options to invest in for your IRA. Nator, like I said in an earlier post, the life cycle funds are a great option because they automatically adjust your allocation to less risky investments for retirement. The T-Rowe price Retirement 2050 fund is where I have my IRA. You just set it and forget it for the most part.

[nator]

Yes! You can never have too many guns! I love to shoot, but the ammo is so damn expensive.

Thats why you shoot Russian 7.62x54R, its as fun as a 308 and as cheap as good quality 22lr.