Q: My daughter who is in her early 30’s would like to open a Roth IRA. What kind should she open and where?

A: She should open up a Roth IRA at any financial company. But I’d suggest she open it at Fidelity, Charles Schwab, or Vanguard because of the incredible number of mutual funds and other investing opportunities. Fidelity Investments and Vanguard have a load of index funds, at the cheapest prices.

There is only one kind of Roth IRA. But your daughter has to remember that opening up a Roth IRA is kind of like buying a fish bowl. If you don’t buy any investments, the cash just sits there, earning 1 percent.

She’ll need to investigate her options and actively put her cash into a mutual fund or index fund in order to get higher returns.

Published: Sep 24, 2006