Hello Mr. Schneider! I wanted to ask for your advice. I’m 25 and wanted to start my Roth IRA with money I’ve saved, however, my job still hasn’t opened back up fully so I am not getting more hours, and I’m afraid unemployment will not be enough to get me by. Would you recommend waiting until I have a more consistent paycheck, or enroll anyways? I was planning on going with Vanguard, but there is a $1000 minimum first deposit.
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Hey AJ! I am curious to see what Jeremy has to say as I am in a similar position. I decided yesterday actually that I wanted to open a Roth IRA just to have it there even though I do not forsee being able to contribute consistently to it for the next 1-2 years. The fact that through Fidelity I was able to open one with no minimum, I went ahead and did it because now it’s just that much easier for me to start contributing once I am able to. Best of luck!
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I’m glad you were able to open one up, Tyler! I chose Vanguard because of their returns which have been consistently at the top, unless anything has changed recently from what I’ve researched so far. Thank you and best of luck to you as well!
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Hey AJ! (Obligatory “Not Jeremy, but here are my thoughts”)
As Tyler stated, you CAN open a Fidelity Roth account and make a much smaller contribution, just to have opened the account. However, I would say that it is more important that you keep all the cash you have on hand until your employment status returns to normal/stable. Once you have your bills paid, debt knocked out and the basic emergency fund back up to where it should be, then tackle a Roth contribution.
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Side Note: I think what @tblank78 is referencing here is the investment company, not an individual fund. Like choosing a bank to store your money, Fidelity or Vanguard are not inherently going to give you better returns. But the funds you choose to invest in within where your account is held, will have an effect. IE: I invest with Fidelity’s platform. But I have access to Vanguard and Fidelity index funds.
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Oh okay, thank you Dustin! I’ll definitely keep that in mind. That does make sense to go with a company without any minimum for right now until my situation normalizes. Thank you!
Hey AJ!
I would point you to the phases of investing. Notably, don’t start investing until you’re out of debt and have an emergency fund saved up. If you’re so low on cash and your future work is uncertain, it’s not time to invest. Trying to won’t get you further ahead, it will just cause you to end up cashless, needing to take loans, overdraft fees, credit cards, etc. So get your job settled, your emergency fund filled, then we can talk investing!
Read through the steps and logic here:
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