Time to Buy that Roth IRA (Yes do it now!)
I can’t stress it enough, with the new year it is time with the stock market being so low (buy low sell high?) that it is time to start buying a Roth IRA.
First pay off any debt you have (other than your house if you have one) but once that is done, it is no better time to be putting money into a Roth IRA. For details see my old post Retirement Planning for Graduates.
So why a Roth IRA? Well if you get a match from your employer plan, you should put money into that every month to get the match. After that use a Roth IRA, you can open a no fee Roth from one of the many discount brokers. Give me an email if you are having trouble I can give you some names.
The biggest reason for the Roth is if you are young, chances are your income is going to go up as you get older. Promotions, starting your thing, etc could push you into higher taxes when you are older. The biggest reason I see right now is all these bailouts? The ones most Americans hate other than all the bozos in DC? They are going to have to be paid some time, and one of the best ways to hedge against paying higher taxes in the future to pay for these bailouts, is to use a Roth IRA, pay taxes now, not latter when they are higher.
So what you should do if you don’t have one already, is set up a Roth IRA and if you can, pay the full amount and be done ($5,000 this year 2009), or have $96 taken out of checking every week automatically. You can talk with your Roth provider how to do this. The stock market is cheap, it is 30% off, it has been flat over the last few months, it could not be a bottom, and I am not one to time the market, but it is obvious, we will look back at this time 5 years from now, and be sad we didn’t buy all the stock we could.
Remember this is just my opinion, understand what you are doing before investing. And I am no way giving advice or binding to any obligation. And please, pay off the damn CC’s, and don’t lease cars. Save and invest.
