Anyone know anything about Roth IRA's?

[87grandnat]

I have a Roth IRA through Bank of America and just learned that the interest rate is like 2.05, from what I have read that seems really low.....does anyone know whats going on with that? (I thought it should be higher) should I switch to somewere else? If so were is somewere that offers a higher percentage rate? From what I have read it seems like the average is around 8 but that is just what I have read.

any help is appreciated,
Joshua

 

[70Mach1]

Sounds like it is invested in a simple interest bearing savings account. They do have an investment department, so call and see what other options you have.

If they do not give you any other alternatives, then look for another investment company and roll it over to them.

Since I am a bit older when I started my IRA, I went with a regular one. It has made on the average of 12.2% per year for the past 5 years since I started it.

 

[87grandnat]

Cool! I am gonna give them a call tomorrow, but am also researching my other options.

keep' em coming
Joshua

 

[87grandnat]

Ttt

 

[NCTyphoon]

Check out Suze Orman's site or her show on CNBC for info related to IRA's or anything financial http://www.suzeorman.com/

 

[2QUIK6]

Sounds like it is invested in a simple interest bearing savings account. They do have an investment department, so call and see what other options you have.

If they do not give you any other alternatives, then look for another investment company and roll it over to them.

Since I am a bit older when I started my IRA, I went with a regular one. It has made on the average of 12.2% per year for the past 5 years since I started it.

Probably by default it goes to a money market low interest saving account as mentioned above. You'll need to contact them, but if its like most other savings institutions, you can then move it around to other types of investment tools, such as mutal funds, bonds, and other related stock market tools, etc, all under the IRA umbrella.
8-10% is the "norm" for stock based investment mechanisms which is what 70Mach is referring to for that 12%, but I bet it hasn't faired so well the last month or so since most have taken a beating that are stock/mutal fund related..but it did come back some last week.

 

[70Mach1]

8-10% is the "norm" for stock based investment mechanisms which is what 70Mach is referring to for that 12%, but I bet it hasn't faired so well the last month or so since most have taken a beating that are stock/mutal fund related..but it did come back some last week.

We'll have to see when I get my next statement in early January, but I bet your right. The thing is, I don't sweat it from quarter to quarter since it is a long term thing anyway.

 

[2QUIK6]

We'll have to see when I get my next statement in early January, but I bet your right. The thing is, I don't sweat it from quarter to quarter since it is a long term thing anyway.

yep... I've been investing alot in reverse convertibles which are short term usually 3-6months...I've already had several bust their cushion margin so when they come due I'll be owning alot of low priced stock I suppose if it stays low till they expire but on the flip side, when they stay within their 20-25% cushion, you can make 10-18% depending on the stock.

 

[87grandnat]

NCTyphoon...I love Suze Orman, I watch her shows and have one of her books (The courage to be Rich) but have never sat down and talked to someone about investing. Rob..my IRA is through Banc of America and I am gonna give them a call tomorrow and see what else can be done, I am not contributing very much right now but am about to go up to the max (4k a year) so I want to be sure it is working for me as much as possible.

everyone thanks for the replies,
Joshua

 

[bobc455]

A Roth should allow a much higher return than that. Perhaps there are other options that you haven't heard about (or maybe you should just avoid that particular institution).

The general rule of thumb is:
1) Put as much into your 401k/403b contribution (if your company offers one) as you can.
2) If you still have money to invest, or your company doesn't offer a 401k, put as much into a Roth as you can.
3) If you STILL have money to set aside, put after-tax money into your 401k.

 

[Gary Wells]

Fwiw, Imho, if anybody has any money invested in any of the money markets with what used to be World Savings, which was just bought out or taken over by Wachovia, keep a close eye on the interest they are paying, as it is dropping like a rock. Interest everywhere on paying accounts is dropping currently, as the feds have dropped the prime interest rate several times recently. The best short term FDIC guaranteed interest paying account that I have seen recently is Community Pacific Bank paying 4.45% APY on a 10K minimum on a 3 month money market. Definitely not worth the while for you high rollers out there. HTH

 

[cisco]

I have a Roth IRA at vanguard and they have low fees and great customer service. A good forum to look at is Guide to the Vanguard Diehards Forums. What is your age? To be diversified, a good general rule of thumb is to have your age in bonds. So if you are 30 years old, you should have 30% of your portfolio in bonds. A good simple way is to invest in a target retirement fund. It will automatically change your asset allocation as you get older. Make sure that you won't get charged any extra fees if you decide to move it or change funds. I strongly suggest that you go to the forum that I linked to above. Post your question over there and they will provide a lot of help. Also a good book to read is the Bogglehead's Guide to Investing.

 

[87grandnat]

Ttt