My main research I did on the IRA is on the Internet through AOL. Through them I found out in a Traditional IRA's you can contribute up to $2,000 per person per year tax free. In other words the $2,000 invested is deducted off your total income for that year. Yet when you retire and receive the money it is then taxed. Also in a Traditional IRA you cannot remove the money prior to retirement without being heavily penalized.

In a Roth IRA you pay taxes on it the year that you invest the money. Though the Roth IRA does bring some benefits such as you can retrieve your money without being penalized as long as you opened your account over five years prior to withdrawal and your are at least 59.5 years old at time of withdrawal. Some exceptions are death, disability or first time purchase of a home.

There is also an Educational IRA which you can contribute a maximum of $500 per year per child. This obviously is only good enough for a college

My father feels very differently though. He feels I should invest in a Roth IRA because it is tax deductible to invest yet I would penalized if I removed my account before retirement. Which makes no sense to me to invest in it for anything but retirement. He feels that it's more stable and better to invest in even though the returns are only approximately 8%. He feels the higher risk of a Mutual fund isn't worth the chance.

Front-end Load fees are fees the company charges for a new account. Back-end fees are fees the company charges to sell or trade shares. 12b-1 fees are the fees a company may charge you annually. They do this to keep their marketing and advertising costs down. Accessibility is also very important because you need to be able to access a wide variety of funds (i.e.medical, agriculture, etc.) so if one market drops hopefully the others balances it out.

My opinion is to invest in a Growth Large-cap fund. Because it will bring back the most money in the more likely to get high dividends group (high risk) there is risk but me myself I am willing to take that risk.. The web page figured out that I would receive $1,058,685 for a Roth IRA. I figured out what I would make on an average 28.5% return with a Mutual fund. Say I invest $5,000 and I let it ride and it's returns ride. By the time I am 44 years old (25 years after initial investment) I will approximately receive $1,233,972. That is $175,287 higher in 21 years less time. That convinced me that Mutual Funds is where I should invest money for my daughter's education. My next project is to figure out exactly which mutual funds I should invest in.

Now there are 2,820 Domestic funds to choose from alone. Yet only 1/5 of them has been around since 1987. So it is hard on some them to find out how they 've done over the last 20 years. I also found out that there were 150 new funds last year alone! That just goes to show you how fast times change. In 1980 my parents were offered a chance to buy stock in Nutra-sweet they choose not too. They both wish they would have now. I have noticed over the years new

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