AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Expert: Warren Boroson Date: 1/11/2007 Subject: Investment ad
Question Hi,
I am not sure if I should invest in a ROTH IRA or a college fund for my child(illinois first).I am 37 years old.
Also if I need to invest in a roth IRA what are the options I have.I have not really foccussed on these type of investment
Pl advise
Bobby
Answer Dear Mr. Bobby:
You should try to do both -- start a Roth, start investing for your children. The college fund might be a 529 plan--every state has one. If your state's plan isn't very good, consider a plan that's out of state. The Michigan plan, with Vanguard, is an example of a good plan.
But tilt your investments toward your retirement--for these reasons:
1. Your children might receive financial aid--and that's more likely if they don't have college savings.
2. Your children can borrow to pay college costs. You cannot borrow to finance your retirement.
As for your options regarding a Roth, investigate a life-strategy or target retirement fund. Such funds attempt to give you a complete portfolio in one purchase--a portfolio that becomes more conservative as you grow older (more and more in bonds, less and less in stocks). Vanguard, Fidelity, and T. Rowe Price offer target-retirement funds. Call up one or more of those fund families, and ask for prospectuses and applications for their target-retirement funds for a Roth IRA.
Write again if you have more questions.
Good luck!
