Roth IRA or CD?

I just got my $1,100 from i-Deal and I want to save some of it.

I have $2,000 in a CD right now at a bank, 12 month but I forget what the rate is.

I am planning on taking $500 from the i-Deal check and putting it in a CD or a Roth IRA. My dad said if I put $500 in a Roth IRA he would match it, so I would have $1,000. The only thing is, with the IRA it's locked up until I am 59.5 unless I want to pay taxes on it.

Anyway, I was looking for recommendations, if anyone has any. I'm leaning towards the Roth IRA unless someone can persuade me not to.

read the book automatic millionare it will better explain all your investment options especially for when you retire.

i read the book in 5 hrs. its easy to read and very informative

Tyler - if you're confident that you aren't going to need that cash in the near future, I would say without a doubt to invest it in a Roth IRA. Go with a growth portfolio.

I started my IRA a few months ago, with a $500 deposit, and I'm doing $150/month, automatically withdrawn from my checking. I've got $950 of my money invested in it ($500 initial deposit, 3 deposits of $150), and I've gained nearly $50 in interest in 4 months.

Since you're young, this is definitely a safe way to go, with a good interest rate for the risk. Investing young is smart, you can go with a low-risk method and have a nice chunk of change when you retire.

[quotee41455b315="tylerc"]I just got my $1,100 from i-Deal and I want to save some of it.

I have $2,000 in a CD right now at a bank, 12 month but I forget what the rate is.

I am planning on taking $500 from the i-Deal check and putting it in a CD or a Roth IRA. My dad said if I put $500 in a Roth IRA he would match it, so I would have $1,000. The only thing is, with the IRA it's locked up until I am 59.5 unless I want to pay taxes on it.

Anyway, I was looking for recommendations, if anyone has any. I'm leaning towards the Roth IRA unless someone can persuade me not to.[/quotee41455b315]

It depends entirely on when you think you'll need the money. My suggestion would be to put the money in the Roth IRA only because you're so young and the compound interest could turn that $1000 into $15,000 or more by the time you're 59.5.

If you plan to work in college or will have other ways to generate enough cash for beer and fun, stick with the IRA. You can calculate the potential returns here, by the way

http//www.moneychimp.com/calculator/compound_interest_calculator.htm[]http//www.moneychimp.com/calculator/compound_interest_calculator.htm

[quote9c05e4316f="KeithA"][quote9c05e4316f="tylerc"]I just got my $1,100 from i-Deal and I want to save some of it.

I have $2,000 in a CD right now at a bank, 12 month but I forget what the rate is.

I am planning on taking $500 from the i-Deal check and putting it in a CD or a Roth IRA. My dad said if I put $500 in a Roth IRA he would match it, so I would have $1,000. The only thing is, with the IRA it's locked up until I am 59.5 unless I want to pay taxes on it.

Anyway, I was looking for recommendations, if anyone has any. I'm leaning towards the Roth IRA unless someone can persuade me not to.[/quote9c05e4316f]

If you plan to work in college or will have other ways to generate enough cash for beer and fun, stick with the IRA. [/quote9c05e4316f]

To expand on KeithA's recommendation - I would say you're better off socking the money away in an IRA, then finding a way to come up with that $500 later on, as you need it.

I don't think I'll be needing the money, I've got the CD that matures in July 2007, a checking account, and savings account, and I'll be working during this summer before I go to college, but I don't plan on working during college. My parents will give me SOME money, but not a lot. They want me to be a student first and all that but they still teach me how to manage my money.

I'll check out the link though.

I have a BA in Economics ) (I don't get to say that enough)

Like they said, if you aren't going to touch it, IRA...

Here at metlife, lol, we don't recommend someone starting a IRA until they get out of college and start a career. Mostly because when you're in college things come up and you might be forced to take that money out. Then again they say that if you start your IRA before your're 20 and you put money into it every pay check you'll be a millionaire by the time you retire on an average middle class salary.

CD? Itz all about mp3 lol

But in all seriousness, go with the IRA. I like to think of the majority of freebie earnings as extra, so any money from that (your $500 + matched= 1000) is a sunk cost to you.

How about trying money market?

That is awesome that you care about your future. So many young people blow through money and spend it as soon as it is in their hands (even before).

I too advise IRA as long as you would be okay if an emergency situation came up. With what you have mentioned so far i think you;d be fine.

Also that is great that your dad is going to match your 500. It shows he values you investing money for your future and i hope his act of matching your money sends a powerful message to you.

\i think many people can take a portion of their paycheck and have it directly put into an IRA. If you are not living paycheck to paycheck, this is the way to go.


Always great to see sensible decisions with money!!

[quote8a4e9e332f="23deuce23"]How about trying money market?[/quote8a4e9e332f]

Money market is good - but it's got a lower return on your investment, since on most MM accounts, you can withdraw from the principal at any time without penalty. It's perfect for saving up for big purchases - mine's going to be for a down payment on a house in the next year, and for a new car for the wife.