IRA and Apple

[seriousthistime]

Hi all,
For Christmas I am getting my 29-year-old son one share in Apple. He works for a small firm, job is as secure as any job these days, he's a homeowner, but has not started his retirement savings yet. He does not have a 401(k) option at work.

The point about getting one share of Apple is to get him interested in, and excited about, investing. Consider it a springboard for his future. He is an Apple whore so is excited about the company and its prospects.

So, I'm trying to decide two things: Roth IRA or traditional IRA? Since his federal tax rate is relatively low now (I'd guess 10%), and we can't predict what tax rates will be like 40 years from now, I'd guess the Roth would be better for him. Do you agree or disagree?

Second question: where do I go to get one share of Apple at a reasonable fee, and open an IRA where he can get into broader investing in mutual funds and individual stocks?

[Deleted]

Opening a brokerage IRA with a single share of stock will not meet any sort of minimums & you will end up subject to minimum annual fees I think. If you are going to look into where to open accounts I would suggest Vanguard or Fidelity and carefully check the fees for a small account. They do have 'starter accounts' or at least used to, where if you direct deposited a monthly amount they waived the fees.

If you want to buy one share, do so, but just open a traditional brokerage account like Ameritrade or E-Trade. Get the certificate (I think that costs like $25) for fun.

[livinincali]

Sharebuilder might be the best low cost option for a small investment like this. There's much better services out there but there are minimum balance requirements and other fees which would be detrimental to a small investment like this. Most traders swear by Interactive Brokers but that's a 25k minimum. I've used TD Ameritrade which is ok for a retirement account, I'm sure Schwab is ok too. You also need to consider the financial strength of the broker you're dealing with. There's some interesting stuff coming out of the MF Global bankruptcy, where it would appear the broker commingled it's trading book with customer accounts. You have to wonder if other brokers might be doing the same thing. I'd stay away from Etrade because of this.