What do I need to know before setting up a retirement account?
If you are planning on starting a career-oriented job after college, like most, then this would be my "rule of thumb" advice:When you start your first salaried job, save a minimum of 5% of your gross income every year. Invest into the lowest fee most globally diversified equity fund that you can find. Most large employers will match this amount.Save 50% of each raise you get and invest it into this account.By the time you turn 45ish consider moving your money into a lower risk account (bonds).This isn't a completely optimal solution. But it will allow you to have a comfortable retirement without making you feel like you are saving for retirement throughout your life, because that's shitty. I have no doubt will someone post here telling you to spend half of your after-tax income on savings, use bar soap instead of shampoo, never eat out, shop at good will, etc. But that's shitty. You don't want to feel like you're saving for retirement while you're living your life. At my b-school this model has been played around with and while it may not be completely financially optimal, it will afford you a comfortable retirement. Also, if you are currently a college student, do not expect to have social security. That will be drained by the next generation of old people, it is highly unlikely that we will have any.
How can I set up a retirement account?
Contact Vanguard (a huge company famous for ultra-low-cost accounts for investors) and ask to start an account. They will give you free advice. (Yes, this is an endorsement of Vanguard. No, I don’t have any financial interest in them.)If their minimum balance to start an account is beyond your means, call around to other investment companies, such as Fidelity.For your first account, consider a no-load (no fee) mutual fund account which invests in the S&P 500 — at least research that as a starting point — it will help you determine what is right for you.If a full-fledged retirement is not available to you yet, simply open a savings account at your favorite bank. Deposit an affordable amount on a regular basis, say $50 per paycheck, until you have the minimum needed to open an account at Vanguard.Ask your employer to auto-deduct the retirement/savings contribution so that you don’t have to think it — you’ll be on automatic!
Is it easy to open a Fidelity retirement account?
Yes. It probably is easiest to do so at the nearest Fidelity Investments - Retirement, Funds, and Online Trading office to you. Call the 800 number if you have difficulty finding an office convenient to you.
Vanguard Target 2045 retirement account.?
Your 2045 plan is good, leave it alone. The IRA is limited to $5,000 a year, so don't go over. You don't pay tax when investing in an IRA until you start withdrawing money in your retirement years. Do not try to time the market, it is a losing proposition. Start building up your emergency money until you have 6 months worth of pay in it.
I just opened up my first taxable investment account. What factors should I consider before opening up a tax-advantaged retirement account?
The only factors that you need to consider are whether (1) your employer offers a 401k / 403b (either Roth or Traditional, depending on your current tax bracket and anticipated retirement tax rate) and makes matching contributions, and (2) you are eligible to find a Roth IRA. The value of the tax defferal over the years is extraordinary.If your employer matches your 401k contributions, then find that account up to the amount of the employer match. That's free money. After you capture the employer match, then fund fund the Roth IRA to the extent that you're eligible (married people can find a ROTH if they earn less than ~190k), up to the $5,500 annual limit. Thereafter continue to find run 401k / 403b up to the $18,500 limit. Thereafter consider investing in a taxable discount brokerage account, and minimize short term trades to reduce transaction costs and tax liability.
How old do you have to be to start your retirement fund?
If you are American and you EARN money, even from your parents in return for doing chores, you can open an IRA at any age (it might be best to wait until you are a plausible age to be earning or making long term financial decisions, however). unless they are paying you enough that you have to pay taxes on it, you should open a Roth IRA since the money you pay into it has already been taxed (at the rate of 0%), which means that it can grow and be withdrawn at retirement tax free.[Update - Please ignore the this paragraph since you can actually only invest an amount up to your taxable income in each year although there may be a way to work around this when initially opening the Roth IRA by first opening a Traditional IRA and then converting it] My impression is that you need to be earning money in order to open an IRA, but you do NOT need to have earned all of the money invested in the account, but please see the next paragraph for details of how reliable this information may be...I am NOT a tax advisor and an certainly not YOUR Tax Advisor, so you should consider my advice worth roughly what you have paid for it, at most. You should consult with someone who IS a Tax Advisor, preferably yours, before making any decisions like this.It seems wrong that I have to say this - isn't making financial decisions based upon the advice of a stranger on the Internet covered by the Idiot Tax ?
What is the best company with which to open an IRA account and why?
Since you mentioned opening an IRA i'm going to assume (for this answer) that you currently do not have any assets in the account. This matters because many advisers will have minimum asset requirements. If you are starting out - I'd first like to say congrats on getting started!With that in mind, I'd recommend looking at one of the online brokerages (Schwab, Fidelity, TD Ameritrade, Scottrade, ETrade, etc) since they typically have no fee IRAs.Then as Mike said above I'd consider the services and capabilities you want. For instance if you are planning to use ETFs, I'd use someone who offered no-fee trading in ETFs (Fidelity and Schwab offer a number of ETFs w/o a trading fee). If it's stocks i'd suggest comparing the commission rates at the various providers. And if you want a physical presence near you it'll likely be one of the larger online brokerages. In the end many/most of the online brokerages offer similar services at similar prices so i'd consider working with someone that's makes things convenient for you and provides the services you want.