I'm planning on opening a retirement fund this year. I'm self-employed and in the United States. Thoughts?

Question...how old are you right now? This way we'd have an idea of how long before your retirement is...

Many questions here...do you have a family to worry about? do you have disability/life insurance to take care of things if the unexpected happens? do you expect to remain self-employed? How much do you earn and expect to be able to invest? What is your risk tolerance and time frame? These must all be considered to know what is the best vehicle for your situation.

That said... for the self-employed there is an Individual Roth 401 plan which is a great product. Most advisors are not even aware of the Roth option since it is not often used. You can put away far more money each year than in an IRA account (like ten times more). In slow years you can add nothing and in good years you can sock away a bunch. You don't get the tax deduction right now (non-qualified) on a Roth account, but it grows tax free and there is no tax liability or distribution requirements after age 59.5, so you will come out far ahead in the end by paying the tax now. If you feel you want, or need the tax write off now, you can have part or all of it be a regular 401 (qualified fund).

Within the 401 you can select mutual funds options with different types of accounts for more or less agressive investing.

My husband has an account with Fidelty, one where he had a 401K and then stopped working for the company. The 401K was rolled into an IRA. The people there are very friendly, their fees aren't that bad, and they are very knowledgable. I would suggest calling them and seeing what they suggest. I think they would be happy to help you figure it out.

Thank you for the link to the Individual Roth IRA. I had not ever heard of this. I will check it out because I am currantly working from home and like the idea that in the bad years you don't have to put anything in. Hopefully there will be more good years than bad.

If you are self-employed, you should consider tax-deductible retirement plans before anything else. While the Roth 401k and Roth IRA provide tax benefits later, the fact remains that as self-employed you are liable for higher taxes (e.g. FICA) than a traditional employee. So every dollar you can save in taxes today is more beneficial to you than saving taxes in retirement, when you've probably sold the business and pay less in taxes. The SEP-IRA is low-cost and easy to understand.

For employees, the Roth IRA and Roth 401k are far more beneficial from a tax standpoint.

And yes, all those questions Dru asked are VERY IMPORTANT.

Before you consider saving for your retirement, your family's protection needs should have a higher priority.

If you were planning on using mutual funds as the retirement investment vehicles, you would want to pick a platform that has several good mutual fund options. Some of the more popular platforms where you can select mutual funds from a variety of mutual fund companies include Vanguard, Fidelity, T. Rowe Price and Charles Schwab.

No mutual fund company is the best at all investment strategies. T. Rowe Price is very good at domestic equity strategies while Royce specializes in smaller cap value investments. For fixed-income, Vanguard, Metropolitan West, Fidelity and T. Rowe Price are all very good.

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Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net

Do you have such an option that a percentage of your salary is took to your retirement fund?

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http://www.bestmortgage-refinancing.us/

15% of our household income is taken out before we get to see any of it. 3% goes into my 401k to get the company match, and the remainder into a diversified long-term portfolio of low cost (both load and no-load) mutual funds and ETFs.

My wife is a consultant part-time, so as she works and gains income it goes into her portfolio, which is designed to be more conservative, fitting her personality, but coordinates with my portfolio to ensure we have a total portfolio consistent with attaining our overall goals.

Chris