Great Investment Question -

Stefan is off enjoying his vacation so I am filling in. He will be back next Tuesday.

I receive emails from many of the students with questions regarding options for saving money. As always, I refer you back to a financial advisor to ensure that you are making the best choices for your situation.

Below is an example of a question.


Hi I'm 22 years old and i work for a company that does not offer retirement benefits. How do i start saving for retirement and where is the best place to start a retirement plan?

Great question as this is more and more common. You may be eligible for an IRA. As a young person normally the best option is a ROTH IRA. This type of IRA offers the best long term tax benefits.

All you have to do is ACT! T Rowe Price has an account you can start for $50 a month or $1000. If you go with the automatic account builder it will help you make small changes so you can continue to contribute every month. We are talking $12.50 a week. One less fast food meal and speciality coffee a week - will start to build you wealth and security.

If this is your only vehicle for saving for retirement - you may want to try to save a minimum of 15% of your gross income and if possible max out your contributions.

Basic Rules for Investing in an IRA
1 Need earned income
2. 2009 limit $5000, if over age 50 $6000
3. Can not contribute more that you earn
4. Roth IRA is normally the best choice for young investors
5. Investment Ideas - research all in one funds/target retirement date

T. Rowe Price gives an excellent data sheet on the differences and eligibility for IRA investing.

After much research T Rowe Price had the lowest minimum to get a new investor started. Other discount firms such as Fidelity Investments had a minimum of $200 amount on an automatic account builder and Vanguard had a $3000 minimum.

As always check with a financial professional before making an investment decisions. All the above companies have licensed representatives available to answer your questions and assist you. They are all salaried and not on commission. This keeps fees low and the representative from pressuring you into a product you don't need. Happy Investing...

Stay tuned................