Best Roth IRA Rates (GoodFinancialCents.com) Video

http://www.goodfinancialcents.com/best-roth-ira-rates/

One of the more common questions I get regarding the Roth IRA is, "Jeff, what is the interest rate that the Roth IRAs pay?" or "If I were to open up a Roth Ira today, what should I expect would be the rate of return?" When I hear that question it makes me realize how little people really know what the Roth IRA truly is. See, IRA stands for Individual Retirement Arrangement. It does not stand for Investment that Returns A Lot or Interest Rate Account. A Roth IRA is just a retirement vehicle you open up for retirement and then you place different types of investments inside of that.

The most common confusion comes when people open up a Roth IRA at their local bank or credit union. When you open up a Roth IRA there, most typically you are going to have CDs inside that Roth IRA and the CDs are going to pay you depending on whatever the current interest rate is going on those investments. That is why people think of the Roth IRA as an interest-paying investment and it is not. If you were to open up the exact same Roth IRA at a brokerage firm or some type of investment firm, inside of that you could have stocks, bonds, or other types of investments that would pay depending on what they produce or what rate of return they did. As an example, let's say you opened up a Roth IRA at a brokerage firm and you wanted you buy an individual stock. That individual stock, depending on the appreciation or if it paid a dividend would decide what would be your rate of return at the end of the year. That is the biggest difference between a Roth IRA at a brokerage firm or a local bank or credit union. That is why I could see there would be some confusion.

A Roth IRA is not an investment. It does not pay an interest rate. The rate of return that you get in a Roth IRA depends on what investments you place inside that. I hope that is a helpful tip on the Roth IRA rates of return and how to get your best Roth IRA rate. If you want more information, head over to the blog, goodfinancialcents.com. I have plenty more, and I look forward to seeing you over there.

That really depends ...
That really depends on what you're most comfortable with. Most of my clients do mutual funds. For me, I've done a combination? of mutual funds and individual stocks. I also have clients in their 40's that don't want to lose any money, so they put it in CD's at their local bank.

Okay so how do you ...
Okay so how do you pick? what you want to go into to your Roth Ira?