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One of the most common reasons people cite for why they’ve yet to start a Roth IRA is high initial mutual fund minimums.  Vanguard is a great mutual fund company, but most Vanguard funds require an initial investment of at least $3,000 (except the STAR fund, of course), which is beyond the reach of many investors, particularly those just starting out.  Furthermore, current Roth IRA contribution limits make constructing a diversified slice n’ dice portfolio virtually impossible.  With only $5,000 per year to play with, savers are able to buy at most 1 or 2 funds per year.  If your asset allocation is anything like mine and contains 9 or 10 different funds, it could take a while to round out your portfolio.

Start A Roth IRA Cheap At T Rowe Price

Enter T Rowe Price (TROW),  which for the past several years has offered a program allowing you to start a Roth IRA with as little as $50 so long as you agree to participate in an automatic investment plan, contributing at least $50 per month to your new IRA.  Almost everybody can afford to invest $50 per month, so there’s really no excuse not to start saving for retirement right away.  While Vanguard is my favorite, T Rowe Price is a well-regarded fund company in its own right.  T Rowe Price’s fund expenses tend to be higher than their Vanguard counterparts, and T Rowe is known more for its actively-managed funds than its index funds.  Still, the ultra-low minimums more than make up for the higher expense ratios, especially since the difference in expenses amounts to literally pennies with balances that small.  Besides, you can always roll over your Roth IRA to Vanguard after your account has grown large enough.

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