Hi Emily - if I were you I would consider opening a Roth IRA through Vanguard, which is known for being very low cost.
Emily, if you want to open a Roth, you'll need to have earned income first. Are you employed? If so, you can open a Roth account through your bank or an online brokerage.
Thanks, Stacy and Elizabeth. Here's another question about Roth IRAs from Lucas.
We have a list of our favorite online brokers -- Fidelity and TDAmeritrade were a couple of our recent top picks.
Kim, do you have any advice for Kate on this next question?
Hi Kate! One of our Starting Our writers, Andrea Browne, just penned a column on getting your first credit card. She noted that retail cards might be easier to get, but come with high rates. And she also offered other options for getting started with credit. Amanda, can you share the link please?
Sure thing, Stacy. I'll post it in just a second.
Hi Kate, thanks for your question. I'd recommend talking with your bank to see if you can qualify for any type of card through them -- they may start you with a low-limit credit card or a secured card. And as Andrea had mentioned in her article, you might be able to get a retail card.
Thanks for posting my low-minimum IRA column -- I was looking for that one! TD Ameritrade was one of the brokerages that stood out as having no investment minimums and no annual IRA fees, which can help when starting out. They're also a good place to open an IRA for kids who have earned income.
Any advice for Lucas on whether he should switch from a SEP IRA to a Roth?
Here's a follow-up from Lucas
Jane, here's another question related to student loans from Seth.
Lucas, are you still self-employed? If you are, then your SEP contributions can lower your taxable income, which can be very valuable. But you need to be self-employed in order to contribute. If you are self-employed, I'd recommend investing some money in a SEP to benefit from the pre-tax contributions, but also contributing some money to a Roth, which can be tax-free in retirement.
Lucas, I just saw your follow-up message about your freelance work in addition to your full-time job. Yes, you can contribute both to a SEP for your freelance income, and can contribute to a 401(k) or retirement plan at work, too, as well as to a Roth IRA. I did a column with more information about SEPs for freelance income -- I'll try to track down the link.
Elizabeth, here's an investing question you might be able to help with from CLH.
Seth, you could get a HELOC, but that rate would be variable, and the likelihood is that rates will go up in the next few years. Also, the federal loan program has flexible repayment terms, so if you get into financial diffiiculty at some point, you can defer the loan or adjust the payments based on your income. For those reasons I'd stick with the federal loans.
Good advice, Jane. Thanks.
Kim, while we're on the topic of Sep IRAs, here's a related question from Alphaman.
Hi CLH - It is definitely frustrating to find any yield today. Still, you don't want to take on too much risk if you're planning on using the money within the next few years. About when do you expect you'll be using that down payment towards a purchase?
Kate, I know we've recommended Credit.com in the past as a good source for information about secured cards. LowCards.com is also a great resource for help finding credit cards in all kinds of categories, including for people with limited credit history.
Jane, any insight into this next question from Elle?
Hi Alphaman. Is your friend the barber self-employed? If so, then I'd recommend a similar strategy as for Lucas -- if he's in a high tax bracket now, then it can help to invest some money in the SEP, which can lower his taxable income. But it can also help to invest some money in a Roth IRA, too -- he'll be able to withdraw his contributions at any time without taxes or penalties, and can withdraw the earnings tax-free after age 59 1/2.
There is proposed legislation that would allow students to discharge private student loans in bankruptcy (that is, treat student loans the same as credit card debt), but it's still being debated. It is, actually, possible under certain circumstances to discharge federal student loans in bankruptcy, but your situation has to be so dire that there is no possibility you could ever repay the debt. As far as I know, there is no trend toward relaxing that stringent criterion.
Stacy and Elizabeth, here's another question on Roth IRAs from jsilotti.
Jane, another student loan question from Tom.