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OfflineCLIT
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ROTH IRA: Aggressive vs. Conservative
    #22633240 - 12/09/15 08:23 AM (8 years, 2 months ago)

I'm trying to decide which one to choose. Let's say I'll be retiring in 30 years, I would assume a "conservative" option would be best since 30 years is a long time? Aggressive may mean it works for you "aggressively" to start with (so it takes more risk?) but settles down later on, etc.

Target Fund vs. Retirement fund, differences?

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InvisibleLana
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Re: ROTH IRA: Aggressive vs. Conservative [Re: CLIT]
    #22633349 - 12/09/15 09:11 AM (8 years, 2 months ago)

If you're retiring in about 30 years.  Go with an aggressive fund.

With aggressive funds you make more of a return, but there's more risk.  Since you've got a good bit of time in front of you, you can afford to take those risks.  If the risks pay off, kudos to you, you'll make more of a return.

But if the risk fails, and you loose, you've got time to recoup your losses.

When you get older is when most people move into conservative positions because, simply put... they're running out of time.  So if they experience a loss, they don't have the time to recoup.

If you're afraid of the risk that's being presented to you then go conservative.  Its safer but, your returns may be lower. 

Its really a matter of preference.  Either way, its good to hear that you're putting money aside for a later day.

Lana


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OfflineManianFHS
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Re: ROTH IRA: Aggressive vs. Conservative [Re: Lana]
    #22637287 - 12/10/15 06:29 AM (8 years, 2 months ago)

can you just deposit money into your roth ira and leave them to sit for 30 years? or do you have to choose positions?

I dont know what the hell to invest in, seems like everything i touch turns to shit, and just kinda want something that doesnt half my money


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OfflineCLIT
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Re: ROTH IRA: Aggressive vs. Conservative [Re: ManianFH]
    #22641407 - 12/11/15 02:48 AM (8 years, 2 months ago)

I think with roth IRA, minimum deposit is $1K, then you can add as much as you want (not necessarily per month), say $100 per 3 months? But I think not to exceed a certain amount per year?

Edited by CLIT (12/11/15 02:49 AM)

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Offlinefivepointer
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Re: ROTH IRA: Aggressive vs. Conservative [Re: CLIT]
    #22658013 - 12/15/15 10:01 AM (8 years, 2 months ago)

For a baby Roth you could set up a myRA account.  Gets about 2.3%.  Then transfer it to a "real" Roth once it gets to $15,000.

https://myra.gov

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Offlinefivepointer
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Re: ROTH IRA: Aggressive vs. Conservative [Re: fivepointer]
    #22658023 - 12/15/15 10:05 AM (8 years, 2 months ago)

Conservative usually is something like 25% stocks, 75% bonds.  Aggressive would be like 100% stocks. 

Target funds adjust the percentage automatically starting aggressive and getting more conservative as it approaches the target date.

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OfflineBrian Jones
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Re: ROTH IRA: Aggressive vs. Conservative [Re: fivepointer]
    #22658834 - 12/15/15 02:35 PM (8 years, 2 months ago)

The minimum requirement for the initial deposit varies widely with companies and funds. Vanguard always has one fund that you can open an IRA with $500, and other in demand funds like their Medical fund had a $20,000 initial investment. After the Bush economy tanked they reduced it to $2000 which is their usual minimum. 


    Most people are better off in index funds which match the market, rather than actively managed funds which attempt to beat the market but usually don't. They charge more. Index funds charge very little to manage your money. The most popular ones index the S&P 500 or the total stock market(which gives you some exposure to small caps)


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Edited by Brian Jones (12/15/15 02:36 PM)

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OfflineBrian Jones
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Re: ROTH IRA: Aggressive vs. Conservative [Re: Brian Jones]
    #22723751 - 01/01/16 06:29 AM (8 years, 2 months ago)

Aggressive vs. conservative really has at least 2 definitions, if not more. As several people have mentioned. The proportion of stocks vs. bonds (or money market) is the usual way of expressing this. The common wisdom on this has kind of changed. Since people are living longer, they now say you need a significant portion in stocks, even at retirement age or you may definitely outlive your savings (unless you did a fantastic job of saving for retirement, in which case playing it safe is probably a good idea)

      Before I get to my 2nd point, there is a lot of agreement that no financial instruments look real good right now. The stock market has produced good gains for a long time, so many people are expecting it to go down. Bond returns are mostly influenced by interest rates, which have been low for a long time, so people figure they are more likely to go up than down, which will hurt bond returns. Super safe investments like the money market having been returning almost nothing for years. I have an internet savings account that was paying 5% when I joined but now pays one or 2 tenths of a percent (if that). My medical savings account at my bank is now paying zero.

    But having said that, if your time frame is long, nearly everyone would advise you to be in stocks, and unless you are a financial genius, just get super low cost index funds, which just match the market and don't try to beat it, because 90% of money managers can not beat the market, and the ones that can can not be predicted. There are a thousand people on the shroomery who are in love with the idea of buying metals, but every expert I've ever read said never put more than 10% in metals. 

    Now, the other definition of aggressive vs. conservative. First, there are mutual funds that will give you a stock/bond combination. It might be 60/40 or 40/60 and this uncomplicates your life because you don't have to buy different stock and bond funds. But what I'm really talking about with aggressive is concentrated (as opposed to highly diversified funds). Nearly everyone does better with high diversification. Concentrated funds are aggressive in a variety of different ways. They may only use stocks from emerging markets, or only emerging markets in Latin America or East Asia, or they may only buy energy stocks. These are highly volatile. They can have some big gains and losses. There are also concentrated funds that pick usual American stocks but only hold 20 stocks, so its a bigger gamble than higher diversification. There are other aggressive growth funds that may hold 80 but they are riskier ones. My personal experience is that I regretted buying any aggressive growth funds. The only exception is medical/health care funds which have been beating the market significantly just about every year. And don't believe everything you hear about the ACA. Since Obamacare care came in 3 of the 4 largest U.S. health insurance companies have doubled their stock price and the other one tripled. But as any prospectus for stocks or mutual funds will you tell you "Past performance will not guarantee anything in the future"


--------------------
"The Rolling Stones will break up over Brian Jones' dead body"    John Lennon

I don't want no commies in my car. No Christians either.

The worst thing about corruption is that it works so well,

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OfflineCLIT
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Re: ROTH IRA: Aggressive vs. Conservative [Re: CLIT]
    #23081268 - 04/04/16 02:50 AM (7 years, 10 months ago)

Just wondering if I have to worry about the yearly taxes if I have a roth IRA when I file my annual taxes? I would think not considering it's completely untouched and from what I understand a roth IRA is tax free.

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InvisibleMr. Bojangles
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Re: ROTH IRA: Aggressive vs. Conservative [Re: CLIT]
    #23099229 - 04/09/16 01:34 AM (7 years, 10 months ago)

The tax on Roth IRA's come out of your income.  So when you get a paycheck, that money gets taxed and then you contribute to your Roth IRA.  Since all income going towards an IRA, Roth or Traditional, usually comes from taxed income taxes are deferred in a traditional IRA by deducting contributions at years end.  So it's actually less work to contribute to a Roth IRA in regards to yearly taxes and filling out your information.


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