I have $5000 and would like to invest in a Roth IRA. I have read good things about it but don't really know what to do. I'm 32 and work for a state agency in Ohio. I have about 5.5 yrs of service.

I don't want to depend on my pension alone.

Thanks for your suggestions.

I'd suggest opening your Roth with one of the big three (Vanguard, T Rowe Price, Fidelity). Opening an account on their website is quite easy. Or you can call them if you prefer to speak to someone.

These three certainly aren't the only game in town but generally they will have the best funds to choose from, the lowest fees, & good customer service.

I agree 100% with Tightwad. Pick one of the three he mentioned, call them up, and get started. I have my preference among the three as do many on this forum. But I think we all agree that you really can't go wrong with any of those three!

Do you have any other programs you may have started years ago and forgotten? (maybe though a former work place etc). Sometimes these programs had great conditions locked in, and would be better than any program you could open these days.

I agree with you. The best way to invest is to minimize the charges, so that you can maximize your returns. If a broker charges 2% management fees, it means that your investment has to make more than 2% or else you won't make any money on your investment.

In my opinion, do not put all $5,000 in a fund straight away. You can put $100 into a global equity fund, and $100 into a global bond fund. Do it monthly, so that dollar cost averaging comes into play, making your fund cost less. Also, by buying both the global equity fund and global bond fund, you are diversifying your assets, so that you still have money left in case of a stock market crash.

If you have $5000 today, go ahead and invest it. Don't waste time and effort dollar cost averaging like this. Dollar cost averaging is a psychological strategy (because we feel worse about losing money than we do about missing out on gains), not a mathematical strategy.

And what funds, pray tell, would allow you to start wtih $100?

Actually, I agree with your point. But I think T. Rowe Price lets you do $100 monthly investments starting with nothing.

You are correct. But T Rowe's Global Stock Fund has an expense ratio of 0.87% vs. Vanguard's at 0.59%. T Rowe's Global Bond Fund has an expense ratio of 0.83% vs. Vanguard's at...oh wait, they don't have a global bond fund.

So basically with the OP at 32 years of age, wgleo is recommending a 50/50 asset allocation between stocks and bonds. Moreover, he's willing to up pay quadruple the expense ratio vs. just popping $5K into the Total Stock Market Fund at 0.18% and adding to an International Stock Market Index Fund next year with an expense ratio of 0.22%, then adding a bond fund as he enters his 40s. Brilliant.