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[pedanterast]

On the Traditional vs. Roth IRA issue

The first IRA account I opened was a traditional - I was younger wanted to save, but also wanted the tax credit.  Without the credit I would have owed a bit in taxes that year, with the credit I got a nice (not huge) refund on my taxes.  At the time the tax credit was the deciding factor.

A few years ago I opened a Roth IRA since the tax credit wasn't important and it's much more flexible (you can withdraw contributions early penalty free in many cases).

An important point is that the traditional IRA gives you a tax deduction and not a tax credit.  The value of a credit is dollar for dollar (assuming you would owe at least that much tax without the credit, and every credit is different).  The value of a deduction is the amount x my marginal tax rate.  So if I put $5000 in a traditional IRA and my marginal (not average) tax bracket is 30%, the deduction is worth $1500 and not $5000.

There is also a credit for contributions to any kind of retirement account, but it is only available to people with fairly low incomes.

[concordancia]

I lied. I used the money to pay down debt. However, this year, I really, really do have money set aside. I plan on opening the account and putting in the first half of my contribution this week. If I can make a decision :(

My retirement option with my current institution is with Fidelity, as are my partner's 401(k) and IRA, so I am leaning towards diversification.

A local credit union has a fixed rate IRA that sounds like a CD (ie, terms of 12-60 months). I suppose it rolls over again after that? I realize that might be less than inflation, but all of my investment accounts are currently negative returns.

I should probably just buy gold to keep in my sock drawer.

[concordancia]

PS: I know I am going Roth, it is where and with what investments that has me paralyzed.

[womanofproperty]

PS: I know I am going Roth, it is where and with what investments that has me paralyzed.

I vote for the Vanguard total stock market index fund, to begin with. I also like their long-term corporate bond fund, but that's an "as you get older" thing. If you're young (I'm not) then you probably want to have most of your retirement funds in equities. This is a personal opinion, of course. I'm not an investment advisor.

For reading:

http://www.amazon.com/Little-Book-Common-Sense-Investing/dp/0470102101/ref=sr_1_1?s=books&ie=UTF8&qid=1306437819&sr=1-1

http://www.bogleheads.org/wiki/Main_Page

You don't have to agree with the philosophy, but it's worthwhile to consider the approach.

Earlier on this thread, Clean recommended TIAA-CREF. Not what I would recommend.

[pedanterast]

For sure there is no point in putting a CD in a Roth IRA.  You want your highest growth investments in the Roth.   

[rugger]

I am in basically the same boat and decided to go with Vanguard's target retirement fund (in my case, the 2045 fund). I just wanted something I could set and forget - monthly withdrawls from my checking account and a shifting asset portfolio as I get closer to retirement age.