IRA help?

[toothfairy03]

DH and I want to start up a Roth IRA. I've heard that you have to deposit at least $1,000 to get it going, is that true?

[hteew]

I've always seen it as $1,000 minimum but it may depend on the bank. If there is a particular bank or fund that you are fond of, I would check out their website. Sometimes they will allow you to set aside monthly debits from an account to make contributions.

I bet Rich will be able to help with this one!

[Rich Lunsford]

Good question! I’m happy to hear you are starting the Roth IRA. It is quite possibly the best investment gift Congress has ever provided for us. The Roth IRA allows you to invest today and shelter your growth from any taxation. No taxes! – Nice. You do have to wait until your retirement age of 59 ½ to pull out the growth portion to qualify for the tax free part. But hey, it’s for retirement right? Allowing 30 plus years of tax free growth is a terrific opportunity and can really add up.

Keep in mind that the Roth IRA is nothing more than the name of the account. You can place almost any type of investment you choose inside of the Roth IRA. You have the choice of Certificates of Deposit (CDs), mutual funds, stocks or bonds, and many others. Most banks advertise Roth IRAs assuming you will use a CD as the investment choice in your Roth IRA. The $1,000 minimum you have heard of is usually based upon an investment in CDs. Many mutual funds (as well as some at USAA) will allow you to begin investing for as little as $20 per month. You can speak to an advisor at USAA that can help discuss options that may be right for you. Keep planning for your future success!

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Consider the investment objectives, risks, charges and expenses of the USAA mutual funds carefully before investing. Contact us at 800-531-8910 for a prospectus containing this and other information about the funds from USAA Investment Management Company, Distributor. Read it carefully before investing.

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