By Gail MarksJarvis
There’s nothing worse than telling someone with good intentions about saving that their handful of hard-earned money is too puny to interest you.
Yet that’s what happens at this time of year, when people get motivated to open their first individual retirement accounts.
Many of the institutions that often are in news articles about IRAs don’t want the regular person with big goals but small cash, or at least not until the cash has turned into thousands.
Some mutual fund companies don’t want to bother with you until you can show up with $1,000 or more. For some, the minimum is $3,000.
That’s disheartening, because a person starting with a couple of hundred dollars in an IRA or Roth IRA can build their money up quickly into nice sums if they invest wisely and are committed to dropping a little money into those accounts every time they get a paycheck.
An 18-year-old investing $250 a year in a stock market mutual fund can look forward to amassing almost $400,000 during his working life.
If he or she ups the sum every year as employers grant raises, getting to $1 million would be likely.
So if you are motivated now, you can find a firm that will welcome your meager investment.
An easy way to get through the door is to request a target date fund for your IRA or Roth IRA investment.
These funds are made for people who don’t want to think deeply about whether to choose stocks or bonds, or how many of each.
Rather, all you have to do is pick a fund that has a date in the name the date when you are likely to retire.
That date tells the fund manager what percentage of your money to invest in stocks and bonds based on what tends to be appropriate for your age.