Get The Best Roth IRA Rates

Like all bloggers, I obsessively check my site’s stats.  Traffic sources, popular keywords, I keep track of everything in the vain hope of one day putting this knowledge to good use.  Occasionally, I’ll get a fair amount of traffic from certain keywords interesting enough to write about.  Lately, one such keyword is “Roth IRA Rates” or “how much do Roth IRA’s pay?”

Those searching the web for Roth IRA rates are asking the wrong question.  IRA stands for Individual Retirement Account.  A Roth IRA is nothing more than a type of account with certain distinctive and highly-advantageous tax characteristics (see Roth IRA rules):  it doesn’t represent any specific investment;  rather, it is a tax-advantaged account you can use to buy practically any investment you want including Certificates of Deposits (see How To Find A High Interest CD Online)

What “Best Roth IRA Rates” Really Means

I’m assuming that what one is really looking for when searching for “Best Roth IRA rates” is how to get the best return for the lowest risk.  The answer to this question depends entirely on each individual’s risk tolerance and time horizon.  For some, CD’s or short-term government bonds are appropriate due to their guaranteed rates.  For others, an aggressive portfolio of stocks might fit the ticket.  And for yet others, the answer may be real estate.  But for most, the optimal portfolio will include a mix of all these asset classes and more.

Since there is unfortunately no such thing as a Roth IRA rate and Roth IRA’s don’t “pay” anything in particular, you’ll have to educate yourself about the investing process in order to make an informed decision.  Don’t worry, investing is a lot easier than it sounds and there are plenty of free and inexpensive resources to help.  For starters, check out my article on basic portfolio theory and my own Roth IRA allocation to get an idea of what a reasonable allocation might look like.

Other great books for beginners:

• The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William Bernstein
• All About Asset Allocation by Richard Ferri (read my review)
• The Bogleheads’ Guide to Investing by Mel Lindauer, Taylor Larimore, and Michael LeBoeuf
• Oblivious Investing: Building Wealth by Ignoring the Noise by Mike Piper (read my review)