How does a Roth IRA work?

[Ezekiel 25:17]

Got a Fidelity account set up. I put $500 in a few days ago. Didn't move at all.

So how does it work as far as growing over time? Obviously I'll keep money into it.

 

[BmoreGorilla]

Did you buy any stocks?

 

[Ezekiel 25:17]

Did you buy any stocks?

I have a separate broker account for that. I have shares of PLTR, but that's it.

I thought a Roth IRA you just had to make contributions of up $6000/yr?

 

[Deuterion]

Got a Fidelity account set up. I put $500 in a few days ago. Didn't move at all.

So how does it work as far as growing over time? Obviously I'll keep money into it.

I know someone can nitpick this but I'm going to explain it in basic terms.

A Roth IRA is just like opening up an Individual Brokerage account at a Broker like E*Trade but the difference is that the money put in is pre-taxed and gains cannot be pulled out until retirement age. Any premature withdrawals will incur a tax. With that said, you still need to invest into stock, bonds, mutual funds, etc to get a return...it's not something that you just put on autopilot. You can have the investing done for you but fees vary per brokerage.

 

[ucanthandlethetruth]

Got a Fidelity account set up. I put $500 in a few days ago. Didn't move at all.

So how does it work as far as growing over time? Obviously I'll keep money into it.

They usually pick you a investment portfolio or the best thing to do if you know the market you can literally go sign in the account and choose which stock portfolios(s) you want and distribute funds to each portfolio in the amounts you want..if you are debiting $$ to the IRA weekly/monthly you can set the percentage each portfolio recieves as well

 

[BmoreGorilla]

I have a separate broker account for that. I have shares of PLTR, but that's it.

I thought a Roth IRA you just had to make contributions of up $6000/yr?

You gotta buy stocks if you wanna see movement. If not it’s just a savings account with no interest
Its for retirement so I don’t wanna do any of that volatile shyt so I stick to mutual funds for mines. Super long term growth. But don’t treat it like the rest of your portfolio and be looking at it everyday

 

[Ezekiel 25:17]

I know someone can nitpick this but I'm going to explain it in basic terms.

A Roth IRA is just like opening up an Individual Brokerage account at a Broker like E*Trade but the difference is that the money put in is pre-taxed and gains cannot be pulled out until retirement age. Any premature withdrawals will incur a tax. With that said, you still need to invest into stock, bonds, mutual funds, etc to get a return...it's not something that you just put on autopilot. You can have the investing done for you but fees vary per brokerage.

Yeah no one explained the later part to me. So now I have to figure out what to invest in, and it's gotta be relatively safe, otherwise it's just gambling with savings.

 

[FlexPavilion]

Post above by Deuterion explained it well...

If you don't have $500 a month to invest in one, I would suggest investing in something else smaller. The Roth is easy retirement money. If you can afford it, get one now before the government ban these shyts.

 

[Apollo Creed]

Just open one via Betterment, they will invest for you.

6k a yr aint nothing this should be one of many avenues for you of you can afford it.

 

[Xyrax]

I also use fidelity. But yeah your money is sitting in dollars until you specify investments for it.

Put it in an index fund, or in a stock you like. Its still like the normal market, the ROTH IRA just has a yearly limit because of tax benefits you will get when you turn 59.

But you should always max the 12k in it (or 6k if single) first every year. Then start putting money in your taxable investment account.

The safest investment is something like a market tracking index fund. Those tracking back a century never lose over TIME. They always return as long as you dont fukk with them.

VTI is a good one. Slow burn, earnings over time that will beat any high yield savings account by far.

 

[Ezekiel 25:17]

I remember someone saying something about Vanguard? That a safe route?

 

[Xyrax]

I remember someone saying something about Vanguard? That a safe route?

Yep, Vanguard is VTI.

Vanguard Total Stock Market Index Fund ETF

Thats the safest investment you can make that will still make bread over time. They have some more aggressive ones too, but if safety is your thing, this is it.

 

[MasterOfAllHeSurveyz]

Yeah no one explained the later part to me. So now I have to figure out what to invest in, and it's gotta be relatively safe, otherwise it's just gambling with savings.

Go with VTI/VTSAX.

Max that hoe out if you can ($6K/year).

You can pull your contributions out at any time without penalty. However, the rules are different for earnings from your contributions (Roth IRA Withdrawal Rules). Look at the qualified/non-qualified sections.

You can drop another $6k in it right now, for the 2020 tax year, if you do it before April 15th.

 

[Ezekiel 25:17]

Yep, Vanguard is VTI.

Vanguard Total Stock Market Index Fund ETF

Thats the safest investment you can make that will still make bread over time. They have some more aggressive ones too, but if safety is your thing, this is it.

What are the more aggressive ones?

 

[MasterOfAllHeSurveyz]

What are the more aggressive ones?

The ARKs (ARKK,ARKQ, etc.).

But stick with the total market funds. This is a marathon, not a sprint . . . unless you're in your early 20s.

 

[Deuterion]

Yeah no one explained the later part to me. So now I have to figure out what to invest in, and it's gotta be relatively safe, otherwise it's just gambling with savings.

I invest in mutual funds but every now and then invest in some stocks like Delta which has been doing really well for me.