Before you jump - check all there is to know abut deferred accounts... you don't owe taxes on it until you are ready to retire, and then the tax rate for age 71 (the year you MUST withdraw) is much less than your tax rate now.

It may be unavailable for emergencies until you are retired- and then you will pay a huge tax on any withdrawal before age ;71, - but for saving for retirement - it can't be beat.

Noooooo. One can withdraw at age 59 1/2 with a simple IRA without a penalty, and just pay whatever tax is due on it for your tax bracket. One must start taking mandatory withdrawals at age 71, however.

The Roth, however, allows you to NOT PAY tax on your interest earnings. It's not as fluid as you may assume, however, Rob. You will pay tax on your interest earnings (but not the priniciple) with a Roth if you pull them out before age 59 1/2 unless it's pulled out for some very specific reasons.

Be also careful if you are rolling over other IRAs into a Roth. They can have greater restrictions then traditional Roths.

I pulled out money from my simple IRA when I hit the 59 1/2 mark to invest in some real estate. I got it penalty free, but had to pay taxes on it. No penalty. And age 71 doesn't automatically put a person in a magic income tax free bracket. It's just assumed at that age, you'll probably be retired and in a lower tax bracket. It doesn't always work that way if you have a large investment income, or income from properties or work. You tax advisor will work all this out for you and that's how I ended up with the IRA I ended up with and had no qualms about flipping it for a real estate investment paid in cash I felt would potentially give me a better return down the road if I ever had to sell it.

I wanted to add you do not have to withdraw a Roth at any given age. You can live to a hundred and still have your Roth intact and it can be used as an estate builder if you so wish. But that may leave tax ramifications to your survivors, so check it out.

I chose a simple IRA for several reasons, but deferring taxes in your younger years can make sense if you are at either end of the financial spectrum. The thought one needs to hold as they start socking money away in any governmentally regulated plan is that the game rules can change at any time.

I can really understand wanting to keep some money fluid for emergencies and given the economic climate now to do so safely and gain some sort of return on it is become increasingly difficult. If you go to two different advisors, you could get two differing opinions as well. LOL. I applaude you for giving it serious thought. Not every young person thinks ahead because they are invincible and immortal. LOL. It is so much easier to start young with your financial planning but so many don't and end up playing catsup in thier fifties and sixties and start socking money in when they'll soon be drawing it out. Good luck.

Wish me luck! I am back into the world of investing as of next week. It won't be a Roth, it'll be investment fund. I appreciate all the kind words, but the guy who is working with me, tells me less penalties this way. I'm going to save with it, and then lump sum pay my lawyer, then a car, then a house downpayment, then only retirement.

I'm on the road! I'm totally giddy with excitement if you can't tell.

:)

I wish you luck in everything.

Wishing you very good luck, and a hug for your rapid [even if it didn't seem to be so] recovery from the past few years.

I can't offer investing advice, mainly because I've always had such a widespread mix of types of money-places that even if many types went ouch, there were plenty which did fine. Just be careful to read all the fine print especially as it refers to whatever/whenever money is paid out [aka taxes, fees, and handling charges]; don't believe everything anybody tells you but remember it's more likely to be true if it's written by a reliable person with a good history; don't trust others to spend your money better than you can; and don't rely on any single type of investment for future use -- boys not only have their toys, a lot of them play games with money and feel free to changes the rules to suit themselves. Oh, and recieving compounded interest is always better than paying it :)

I agree with meldy.

Thanks meldy! I do have many places. I had this guy who has been working with my dear friend, who lost her husband very suddenly last year, helping me. I've been to the SSI retirement symposium so that I could hear what I might need to tell mom who is just about to retire (age 70 next year), and what I might start doing to position myself. I saw him in action there; he was giving the right advice. "Don't take Medicare until as late as possible", if nothing else, but there was more, and he was right on.

I've been teaching my son that too, showing him how compound interest was the most important part, so much so, that he could invest X, by age X, and if it averaged X, then he'd have millions by the time he retired (way earlier than 65), even if he quit at a certain point... that he wanted to start now and doesn't plan to quit investing in it. He started his retirement nest egg at age 8 (three years ago), and will put it into his first CD by the mid-year next year ($1,000 minimum), which is pretty good because he started out with getting only $15 a month for everything he does, and although it's up to $45, that's all he ever get. Anything else, he'll have to work a job (to pay for a car, gas, insurance, designer clothes, etc.). He's never taken anything out of the retirement fund because he has another savings that he takes from when he wants the "big" things and already has spending money set aside. I think he'll do it. As long as some wretch doesn't get her hands on it later on.

It has been fast because we knew how to pare down, set aside exactly what was needed for the bare bills, save as much as possible, and some small amount is now being added as investment. Some time next year, they'll get switched. The bigger savings will be all investment fund with a bit going into CDs. And I'll go back to my own personal having-fun-with-the-stock-market investing. I can make big bucks with that, even when the market is down. And God is good. That too. Moreso, because of that.

:)

Duh. I left off, I have an actual pension (can you believe that?!) from my first company, and my 403b from current work. That's how many places? Right now, my 403b is very aggressive. I'll tone that down in another 5 or so years. I'm only 44 so it's ok. And when I tone it down, I'll also bulk it up more. I have several more "percent" to go as I'm not at the full matching. I don't want to do that right now, because I need more access to/control over my money.

Good for you, and good for LF! When he gets to the upper teens, he might feel lonely ~ so few teens have any conception of saving! That's when the peer pressure to spend, spend, spend really grows teeth. Maybe he can reverse the trend and teach them how to make money instead.

I began saving a minimum of 10% of all income (*gross*) when I was his age, and in the next 60 years, toook from it only once ~ (to pay rent, buy dogfood, and 1 lb rice) after having been injured and without salary for 8 weeks. That's when I learned to always keep enough money available to live for 3 months with no other income. The result is that even if the pension disappears and social security goes flop, and 90% of the investments turn negative, I'll still have enough to live on. That's a very good feeling.

" As long as some wretch doesn't get her hands on it later on. "
Ducking and weaving. Don't let some wretched "man" talk you into opening your pocketbook.

Someone already did. Hence the statement. Low down good for nothing, caused me to be set back many many years.

If he can find someone like Meldy who also believes like he does, and they share in the wealth building, it can be "theirs". If she's a good for nothing, that's a wretch.