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I was reading Clark Howard's Guide for Beginner Investors, and have a few questions:

  • What kind of investment account should I put these in? Roth IRA account, regular IRA account, or regular investment account?
  • What will be the impact of the expense ratios? Vanguard's seems significantly lower. What does "expense" actually refer to?
  • I want to "retire" around age 50, but the reality is that I'll probably keep working. What's the best way to go about targeting an accurate retirement age?
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Is the question actually about targeted retirement funds? –  George Marian Sep 6 '10 at 18:20
    
There are 3 good questions here, is there a good way to close the question and ask these separately? –  SpecKK Sep 9 '10 at 6:37
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1 Answer

Tax-deferred accounts are great since you get to grow over many years without any taxation. No taxes equals better compounding over time.

Roth vs. Traditional IRA are a choice that depends on what you expect your income to be at retirement. If you're going to work after retirement, but still draw on your IRA, a Roth is probably the best way to go. I would only use a regular brokerage account if you need the money sooner.

Only use target-date funds if you have no interest in investing and aren't going to get interested. Vanguard is IMO the best one, but you need to look at the mix of funds in the target date funds and be comfortable with the amount of risk.

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