To Roth or not to Roth?

This really varies on who you are and where you are in your life and career (disclaimer). There is also no right choice for everyone (otherwise there wouldn't be choices)

Let me start by explaining the differences:
A traditional IRA account you get a tax deduction, essentially you put money in tax free. The money grows (lets pretend it is alot, because that is just more fun to think about) and then when you pull the money out you pay tax on the entire investment AND the growth on the investment.

A Roth IRA is one where you pay tax upfront (sounds bad so far huh?). The money grows (lets pretend it is still alot, because either way we want our money to grow alot) and then when you pull the money out you do NOT pay tax. Essentially the capital gains (or the "growth") slides through the cracks and you NEVER pay tax on this money (sweet huh?)

For me personally? Roth is the way to go.
I am at the lowest tax rate that I am ever going to be at. Because, you might not know this yet, but I am going to be rich and famous.. and if I'm not rich and famous? I'll marry rich and famous... and if I don't marry rich and famous? I'll rob a bank. (but thats not the point). The point is you will most likely be at a higher tax bracket than your starting salary. The other thing to consider is that if the tax rate grows- which there is a high possibility that it will by the time I am ready to pull out my money- you get to pay tax at the lower "start" tax rate. This also spreads out paying the tax over the time of the investment and you arent stuck with paying it all at once in the end (this just makes us feel better).

You also have more flexibility with a Roth. A traditional IRA has more restrictions: when you can pull the money out, when you have to start pulling the money out, etc. I am not sure where I will be in 5 years, and if I want to pull the money out early to pay for a downpayment on a house, I would rather do so without all the high penalties.

It is important to note that you can only put $5000 a year into the account (this is subject to change, as we know, laws change ALL THE TIME) That is about $480 a month. Even if the amount grows, I'm not sure I want to come up with more than $480 a month anyways. Make a budget. Set the money aside. It is only going to be harder the more time that passes.

Okay, Sold. How do you set one up?
This starts with researching where you want to put your funds. You can invest in a Roth IRA through banks, brokerage firms, and mutual fund companies. You have the flexibility to invest in mutual funds, bonds, CDs, Stock, or other assets. You base this decision off your own comfort level with the risks involved.  DO NOT LET THE OPTIONS SCARE YOU! The most important thing is that you put your money into some Roth IRA somewhere.

The hardest part? Actually sitting down to do it. But wait... you are at your computer right now! As Nike would say: Just do it.

Really lame accountant icon: