Tried to open a Roth IRA today

[Ava]

This past weekend I got to think about my finances. I currently contribute to my 401K to get the employer match.

But my emergency fund is getting too big, even though part of the money parked there is for moving expenses.

So I realized I had enough to start saving more. I decided to open a Roth IRA. I have enough money to fund 2014 and 2015 right now.

I was very happy about it.

I work at a bank. So today during lunch break I went downstairs to the branch. I said I wanted to open a Roth IRA. The teller told me I had to talk to the manager about it.

The experience was surreal. The manager was very nice and we got to talk shop a little bit when I informed her I was also an employee but in a different division.

After that we got down to business. The woman knew nothing about Roth IRAs. She showed me a prospect and read the information from it. She then proceeded to tell me I was actually better off upping my 401K contributions beyond the employer match because I didn't have to pay taxes on that.

She also mentioned opening a traditional IRA or investing on a mutual fund but not inside an IRA.

She said once I invest on it,  I could not get any money out of the IRA until I turned 59 1/2. I told her I can get out my own contributions whenever I wanted. She said; "No, you can't. So make sure to only put there money you won't need."

I finally told her I was going to open a Roth IRA no matter what. She told me to come back but not on  my lunch hour. We would have to fill out plenty of forms, get me an appointment with someone in Securities and open a brokerage account. She said opening an IRA was complicated and will take me more than one scheduled visit.

She also asked me to find out how my 401K is invested and pass along that info to her.

I left the branch with a headache, knowing I had just lost an hour of my life that I will never get back.

Tomorrow I'll go back in and tell her I changed my mind, and I'm not going to open an IRA here after all. 

I am leaning towards opening a Roth IRA with Fidelity online this week, in time to do a 2014 contribution.

Is there anything this woman said that's valuable information?

How easy or difficult will be to open a Roth IRA online?

[Deleted]

Not at a bank! Go to Vanguard. Eta or Fidelity is fine too...

[Ava]

Mar 24, 2015 21:09:38 GMT -5 oped said:

Not at a bank! Go to Vanguard. Eta or Fidelity is fine too...

Why not at a bank? Too many fees?

I'm not going to open it at the bank anyway. It was way too complicated. I had the feeling it would be easier online after talking to this lady.

[Ava]

I am thinking Fidelity since my 401K is with them and I already have an account.

[Lizard Queen]

My first Roth was at my credit union.  It paid very little (fixed) interest. There were no investing options.  (Only opened it to save up a downpayment for my first house.). Some of the folks there were pretty clueless about their procedures.  

I opened an IRA at Vanguard more recently.  It was really easy.  Fidelity is probably just as good, but my dad set that up for me, so I don't have the direct experience there.

[Tiny]

Mar 24, 2015 21:15:55 GMT -5 Ava said:

Mar 24, 2015 21:09:38 GMT -5 oped said:

Not at a bank! Go to Vanguard. Eta or Fidelity is fine too...

Why not at a bank? Too many fees?

I'm not going to open it at the bank anyway. It was way too complicated. I had the feeling it would be easier online after talking to this lady.

Why not a bank--- because you may have limited access to investment options -- Fidelity/Vangaurd/etc. have way more options.  There may be fees or charges thru the bank as well - that you won't have to pay at Fidelity...  

A bank may encourage you to invest in things with fees (that the bank gets!).  If you want advice or need information - you need to talk to the people at the bank -- and you've just experienced what that means.

A dear friend opened an IRA at her bank and had her money 'invested' in CDs within the IRA. Um, she was 30 years old!!!  I don't know why she went along with this plan. Probably because 'she didn't want to loose money'... yet no one mentioned what inflation does to your savings - especially over 20 or 30 years!!!  

I use Fidelity. You should be able to set up the Roth online fairly quickly - especially since you already have an account/login.   Fidelity (and I'm sure the other companies) have tools, and articles to read, and advice available on their website.     The whole process may take a few days - you may need to create a link between your Fidelity account and your bank (checking account) so you can transfer the money.  I did this a couple of years ago and there was one of those ACH tests with a small deposit/withdrawl that had to be confirmed.  Banking has come a long ways in the last few years so maybe that's not necessary (or is more instantaneous). 

You might want to review how quickly you can pull your contributions out of a Roth and you might want to think about what kind(s) of funds you want to invest in.   I use Cash Reserves as my "holding area" within my Roth - that's what my contribution hits first and then automatically gets allocated to a target fund.  I keep 5K in  Cash Reserves - since I'm using that as part of my EF. 

[Ava]

Mar 24, 2015 21:52:54 GMT -5 Tiny said:

Mar 24, 2015 21:15:55 GMT -5 Ava said:

Why not at a bank? Too many fees?

I'm not going to open it at the bank anyway. It was way too complicated. I had the feeling it would be easier online after talking to this lady.

Why not a bank--- because you may have limited access to investment options -- Fidelity/Vangaurd/etc. have way more options.  There may be fees or charges thru the bank as well - that you won't have to pay at Fidelity...  

A bank may encourage you to invest in things with fees (that the bank gets!).  If you want advice or need information - you need to talk to the people at the bank -- and you've just experienced what that means.

A dear friend opened an IRA at her bank and had her money 'invested' in CDs within the IRA. Um, she was 30 years old!!!  I don't know why she went along with this plan. Probably because 'she didn't want to loose money'... yet no one mentioned what inflation does to your savings - especially over 20 or 30 years!!!  

I use Fidelity. You should be able to set up the Roth online fairly quickly - especially since you already have an account/login.   Fidelity (and I'm sure the other companies) have tools, and articles to read, and advice available on their website.     The whole process may take a few days - you may need to create a link between your Fidelity account and your bank (checking account) so you can transfer the money.  I did this a couple of years ago and there was one of those ACH tests with a small deposit/withdrawl that had to be confirmed.  Banking has come a long ways in the last few years so maybe that's not necessary (or is more instantaneous). 

You might want to review how quickly you can pull your contributions out of a Roth and you might want to think about what kind(s) of funds you want to invest in.   I use Cash Reserves as my "holding area" within my Roth - that's what my contribution hits first and then automatically gets allocated to a target fund.  I keep 5K in  Cash Reserves - since I'm using that as part of my EF. 

Thanks for all the info. I'm going to set up a Roth IRA with Fidelity this coming weekend.

And now that you mention it, yes, the lady mentioned CDs.

[Ava]

It make take a few days and maybe it won't be too easy, but they have a phone number I can call for help.

I am so excited about being ready to start this new financial step for me! I've never had much to save and now that I do, I'm so happy about it.

[The Walk of the Penguin Mich]

It is almost stupid simple to open a Roth IRA at Fidelity.  I did so last year, but my 403b was also with them so I already had online access.

Fidelity's customer support is also pretty good.  I received a letter from them about some stocks I had in my IRA.  They very patiently answered all my questions, explaining exactly what my options were and their impact.

They did not give you very good info.

<note to self to fund and rebalance my IRA this week>

[Deleted]

Fidelity has some very low cost Spartan index funds. I prefer Vanguards ownership structure, but could replicate my current strategy at Fidelity with these.

www.fidelity.com/mutual-funds/index-funds/overview

[Ava]

OK, so I easily opened my Roth IRA at Fidelity.

However, when I tried to transfer money into it a message appeared saying I need to have BOTH a cell phone that accepts text messages and a state ID card.

I have the ID, I don't have a cell phone. I plan to buy one this summer so I can finally enter the Twenty First Century, but I don't have one right now.

Call Customer Service tomorrow morning, I guess? There has to be a way around this.

[Ava]

Mar 24, 2015 23:07:24 GMT -5 @aj said:

Fidelity has some very low cost Spartan index funds. I prefer Vanguards ownership structure, but could replicate my current strategy at Fidelity with these.

www.fidelity.com/mutual-funds/index-funds/overview

This sounds good to me. I don't want anything too complicated or too expensive.

[Ava]

I'm sure there has to be a way around it. I'll call customer service tomorrow and they will solve it.

[Ava]

Well, I just called Customer Service.

They are going to email me a transfer form I have to fill out and send them with a check. They will fund my account that way.

As a side note; sometimes we rant about the poor having cars and cell phones. But you see how a cell phone is quickly becoming a necessity to function normally in society nowadays. Same way you need a car to transport yourself to jobs and interviews.

That's one reason why I'm going to get a cell phone. The other one is because I'm job hunting right now and potential employers want to be able to contact you through a cell phone.

Well, I'm glad it will work itself out. I'll make sure to transfer the money to them today.

[The Walk of the Penguin Mich]

Mar 24, 2015 23:44:45 GMT -5 Ratchets said:

Mar 24, 2015 23:32:43 GMT -5 Ava said:

OK, so I easily opened my Roth IRA at Fidelity.

However, when I tried to transfer money into it a message appeared saying I need to have BOTH a cell phone that accepts text messages and a state ID card.

I have the ID, but right now I don't have a cell phone. I plan to buy one this summer so I can finally enter the Twenty First Century, but I don't have one right now.

Call Customer Service tomorrow morning, I guess? There has to be a way around this.

There has to be a way around it. I opened a Roth IRA at Fidelity several years before owning a cell phone, but that was 2006-2007 so maybe the requirements changed since then. I also have an expired driver's license so they must have taken a social security number or something instead.

Grats on getting the account opened! Think that's the hardest step for most people...

There is, I opened a Roth last year at Fidelity.  I had a cell, but it did not text.  I just did an ACH transfer from my savings account to the Roth.  No cell phone necessary.

[The Walk of the Penguin Mich]

Mar 25, 2015 6:35:39 GMT -5 Ava said:

Well, I just called Customer Service.

They are going to email me a transfer form I have to fill out and send them with a check. They will fund my account that way.

As a side note; sometimes we rant about the poor having cars and cell phones. But you see how a cell phone is quickly becoming a necessity to function normally in society nowadays. Same way you need a car to transport yourself to jobs and interviews.

That's one reason why I'm going to get a cell phone. The other one is because I'm job hunting right now and potential employers want to be able to contact you through a cell phone.

Well, I'm glad it will work itself out. I'll make sure to transfer the money to them today.

Does your bank not have online banking?  There is a way you can ask Fidelity to go into our account and take a one time debit.  I didn't need to fill out a rom or write a check.  You can also ask your ank to send money there.

BTW....until at week, I had a very simple flip phone with no features other than calling.  It wasn't until the phone died that we moved to a smartphone.  It worked well for what I needed it to do.

[Deleted]

I'm trying to figure out what you need a cell phone for to open an IRA?  I have accounts with Fidelity and Vanguard, but admittedly they were initially opened a long time ago.  Funding has always been just ACH transfers.  It takes a few days to verify a new account, but after that I can send money off to them any time with just a few mouse clicks.

[Lizard Queen]

I also have Fidelity that was set up several years ago.  I do have a cell that texts, but never connected it to my Fidelity account.

[yogiii]

Yes, I would think it would be at least either text or email.  I always pick the email option and don't recall ever being forced to text for any accounts.  Seems like a bad move on their part.

[justme]

Mar 24, 2015 21:15:55 GMT -5 Ava said:

Mar 24, 2015 21:09:38 GMT -5 oped said:

Not at a bank! Go to Vanguard. Eta or Fidelity is fine too...

Why not at a bank? Too many fees?

I'm not going to open it at the bank anyway. It was way too complicated. I had the feeling it would be easier online after talking to this lady.

A bank is not in the business of investing. Their business is moving money sound frequently. Yea they do invest, but as you learned no one has expertise and they often have higher fees and few choices.

I opened a Roth IRA at ally bank in like ten minutes. I'm assuming vanguard or fidelity would be the same. (I know it looks like I'm not following my own advice but I opened one at a bank with no fees to put smaller sums in until I have the min for vanguard or fidelity. My 401k options have always been good so most of my money goes there)

[CarolinaKat]

I just rolled over an IRA to Vanguard. I didn't need a cell phone, but it did get a little sticky because my old employer had my 401k there and then moved it, so While I could log in, I couldn't actually do anything, as my acct was 'closed' as part of the 401k transfer. So I called this very nice guy at customer service and he did everything while I was on the phone. He prefilled out all the paperwork (the holding company wouldn't do e-transfer) and all I had to do was check it and get the paper notarized at the bank.

I've had accounts at both Fidelity and Vanguard. I prefer Vanguard. YMMV

[Cookies Galore]

Mar 25, 2015 9:42:03 GMT -5 CarolinaKat said:

I just rolled over an IRA to Vanguard. I didn't need a cell phone, but it did get a little sticky because my old employer had my 401k there and then moved it, so While I could log in, I couldn't actually do anything, as my acct was 'closed' as part of the 401k transfer. So I called this very nice guy at customer service and he did everything while I was on the phone. He prefilled out all the paperwork (the holding company wouldn't do e-transfer) and all I had to do was check it and get the paper notarized at the bank.

I've had accounts at both Fidelity and Vanguard. I prefer Vanguard. YMMV

Hubs and I opened a Vanguard account with all of our wedding winnings and we had issue with setting up the online account. I called customer service and the guy was helpful in figuring out that one of us is already in vanguard's system. Hubs and I were like who has a Vanguard account already?? Then I exclaimed very loudly in the CS reps ear "IT'S ME!!!!" I forgot my dad had my college money in my name with them. The rep very helpfully rectified the old account issue.

[CarolinaKat]

Mar 25, 2015 10:32:10 GMT -5 Cookies Galore said:

Mar 25, 2015 9:42:03 GMT -5 CarolinaKat said:

I just rolled over an IRA to Vanguard. I didn't need a cell phone, but it did get a little sticky because my old employer had my 401k there and then moved it, so While I could log in, I couldn't actually do anything, as my acct was 'closed' as part of the 401k transfer. So I called this very nice guy at customer service and he did everything while I was on the phone. He prefilled out all the paperwork (the holding company wouldn't do e-transfer) and all I had to do was check it and get the paper notarized at the bank.

I've had accounts at both Fidelity and Vanguard. I prefer Vanguard. YMMV

Hubs and I opened a Vanguard account with all of our wedding winnings and we had issue with setting up the online account. I called customer service and the guy was helpful in figuring out that one of us is already in vanguard's system. Hubs and I were like who has a Vanguard account already?? Then I exclaimed very loudly in the CS reps ear "IT'S ME!!!!" I forgot my dad had my college money in my name with them. The rep very helpfully rectified the old account issue.

[Cookies Galore]

CarolinaKat Dude, we made out like bandits!

[reader79]

I just opened a new Roth IRA account with Vanguard yesterday. I have a previous one at TRowe that I felt wasn't performing, so that's why I chose a new company. I made my 2014 contribution and the debit hit my checking account this morning. The longest part of the transaction was researching which fund I wanted to invest in. I hadn't put any money in the old account last year, so I won't be in danger of going over the limit. There was some information about transferring accounts, which I will try to do in a few days. 

[The Walk of the Penguin Mich]

Thanks for a timely thread, Ava.  You reminded me to my IRA contribution into my account, and did so this morning.  I'll be checking out where I want to invest it after the money actually hits the account (supposedly 3 days or so). 

It took about 3 clicks of a mouse at Fidelity.

[Ava]

The Customer Service Rep. told me the text was to send me my password or code, I don't remember correctly.

Anyway, I went back to the branch today and transferred the money from savings to checking. I am now completing the form Fidelity emailed me. Tomorrow morning I'll send it to them along with the check.

[Ava]

I also upped my 401K contributions one percentage point today. I won't get the employer match on that, but it's money before taxes.

I won't probably even notice the amount out of my check.

I'm on a roll!