Roth IRA: Not What it Used to Be

I do not have a very large retirement fund (I am 24 and in school), but I am proud that I have one because I have no debt to cancel out my assets. What I have learned from this fund is more important, however, than the money in it (approximately $3,000). I have had this fund for nearly nine years. If I were to add up all the money I have ever contributed, it would not equal the current value of the fund. I do not think I will ever invest my own money without a match into a mutual fund ever again. The Wall Street Journal has called the last ten years a "lost decade" as stock profits have stagnated and have not gained in value during this time. One interesting fact about mutual funds is that there are more mutual funds in existence than publicly traded companys (food for thought).

The other day the New York Times had an article entitled "Coverting Your I.R.A. Into a Roth? How's Your Crystal Ball?" It basically discussed that while accountants and financial advisors can never predict the future when it comes to advising their clients, there is reason to believe that the structure of the Roth I.R.A. will change in the future.

“Some people are looking at the possibility of converting all of their money into Roths, but that could be a very large mistake. What happens if at some point in the future we have a tax revolt? To me, the crazy thing would be not to consider the possibility of crazy things happening in 20 or 40 years.”

-William Z. Suplee IV, of Structured Asset Management

If anything, I.R.A.s are very illiquid. I have had many a friend cash out their I.R.A. during a bout of hard times with plenty of penalities tacked on. In the meantime, I am going to look in to transferring my Roth to Vanguard from TIAA-CREF and will continue to look into smarter ways to invest for the future.