Would you open a Roth IRA today, or wait 6 months?

[NickB79]

I'm going to receive a $2000 Christmas bonus this month, and was thinking of using it to open a Roth IRA. My wife is very insistent on it being a Roth, due to the fact we can pull cash from the principal in an emergency, and she is VERY risk-averse. It's either this or keep putting money into a simple savings account.

It would be through our credit union, and we would stay in pretty low-risk options.

So, get started now, or wait and see how the markets behave?

[guillaumeb]

1. The best time to start saving is yesterday.

Much depends on your age, and your tolerance for risk, but starting a Roth is an excellent way to save.

Can you set up automatic payroll deductions from your checks? Money never seen is not missed.

[NickB79]

4. Yep. I already do that with savings.

[guillaumeb]

6. I am retired.

Our family accounts are mainly bond funds, but as a Federal retiree, I receive an annuity.

My advice to my children, in their 30s, is to put nearly all of their money on growth funds. 30 years is plenty of time to save and change allocations of funds as retirement nears.

Congratulations on saving. So many do not.

[doc03]

5. That is good advice, it beats trying to time the market fluctuations. nt

[guillaumeb]

7. True.

And long term, there is no real way to outthink the market. So investing for growth is best.

[doc03]

2. I would say do it now, I don't think anyone can time the

market. I moved $50000 from my IRA to a Roth in 2011, I paid the tax out of non IRA savings. The balance today is $84000
even after this last month and that is all tax free.

[empedocles]

3. Roth is, as above comments indicate its a good idea

However, there is a 10% penalty for early withdrawal [with some specified exceptions]

[NickB79]

12. I thought that only applied to withdrawing on earnings

So long as you only take out of your contributions, you don't get penalized, right?

I'm going off this: https://www.rothira.com/taking-early-withdrawals-your-roth-ira

[empedocles]

15. Of course, you are correct.

In the short term, conservative investments, small amount invested, - that's not much to draw down.

[AncientGeezer]

8. Right now...I'm adding to mine.

[mahatmakanejeeves]

9. You can put the money in a money market account within your Roth.

If you think that stocks are too high, park the money in cash within your Roth. If the averages decline to a point where you think that buying stocks makes sense, use the money in your Roth IRA's money market account to buy an index fund, or individual stocks, or whatever you want to buy. I did that a few weeks ago.

As long as you put the money in before April 15, the contribution counts for your 2018 tax year. Just remember to note that this is a contribution for 2018 and not for 2019. Until April 15, you can make that choice.

[progree]

10. Right, having a Roth IRA account has NOTHING WHATSOEVER to do with being in or out of the market

I wish people would stop equating being in an IRA or a 401(k) as being the same as being in the stock market or in pork belly futures.

I have some ordinary bank CDs in an IRA, as well as a bond fund.

[doc03]

11. If you are going to invest in a equity mutual fund it has plenty

to do with (the market). Bonds funds are also (the market). In 2018 pretty much every segment of the market was down but CDs and MM accounts. Of course there are always a few stocks that do well. I think if a person could pick the right company there will
be lots of money to make in the growing cannabis market. Its hard to pick one though I will look at a company and read positive articles about it then read others that totally contradicts them. So much misinformation out there. Like a hotel review you will read 10 posts talking about the great service and accommodations then there will be ten others that say the employees were rude and there were cock roaches everywhere.

[progree]

13. What I'm trying to say is that one is no more required to be "in the market" in a Roth IRA or

any IRA than one is with a regular taxable account.

Yes, one can have an equity mutual fund or a bond fund in an IRA. One can likewise have those in a regular taxable account.

One can have CD's and money market funds in an IRA. One can likewise have those in a regular taxable account.

In other words, the decision to have an IRA or not has nothing, nothing to do with which of the above kinds of investments or savings vehicles one utilitizes.

Oh, there are some things that one can't have in an IRA, but that list doesn't include safe haven things like money market funds or CDs or T bills etc.

[doc03]

14. I understand I hear that all time. I know people

that got spooked in 2008 and quit funding an IRA. Where they could have still invested in bonds or a MM CD or fund.
I left my money in the market and my balance more than double what it was back in 2008 and that is after taking 4% out each of the last 6 years. Some people have no tolerance for risk and should probably stay out of the market.

[progree]

16. Hopefully your next 10 years will be the same 😂 🎶

I left my money in the market and my balance more than double what it was back in 2008 and that is after taking 4% out each of the last 6 years.

[A HERETIC I AM]

17. Would you ask the same question about a checking account?

How about a savings account?

As Progree stated above, you don’t have to be in the market. It’s just an account.

Put cash in it and leave it as cash till you are comfortable doing something else