When is the best time for a premed to open a Roth IRA

[NP545]

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When should one open a Roth IRA ideally?

Right now, I have a part time job, minimum wage, so it's not taxable (with the amount I'm making annually). Should I open one now, or when I get my loan for med school? Or sometime else?

 

[235009]

When should one open a Roth IRA ideally?

Right now, I have a part time job, minimum wage, so it's not taxable (with the amount I'm making annually). Should I open one now, or when I get my loan for med school? Or sometime else?

When you get to residency.

If your minimum wage job provides you with extra cash either use it to have fun or save it for a rainy day in the near future (car breaking down during med school or some other unexpected expense). It's admirable that you want to be responsible and open a retirement account but this is not the time for it. You should definitely NOT be putting loan money into a retirement account. If you aren't going to use it immediately don't borrow it.

 

[cidem2065]

Perhaps a CD account?

 

[WhittyPsyche]

I opened one when I turned 18, and then got my employer sponsored 401k two years later. Most do it during residency I guess, but there is no downside to starting earlier.


Edit: a part time job is prob not enough to make a ideal contributions, you should probably just wait.

 

[StayCoolIceCube]

If you make contributions prior to the year before you matriculate, your retirement account funds cannot be considered by schools among your EFC income/assets. For example, if you started working in 2010 and were applying this cycle for 2015 matriculation, you should have contributed to your retirement accounts in 2010, 2011, 2012, and 2013 to have those funds protected from FAFSA and medical schools' financial aid calculations. They will consider your 2014 income as "up for grabs", even if you contribute 100% of it to Roth IRA/401k accounts. Ask on the Personal Finance subreddit forums for more educated & helpful advice than what you will find here on SDN.

 

[235009]

If you make contributions prior to the year before you matriculate, your retirement account funds cannot be considered by schools among your EFC income/assets. For example, if you started working in 2010 and were applying this cycle for 2015 matriculation, you should have contributed to your retirement accounts in 2010, 2011, 2012, and 2013 to have those funds protected from FAFSA and medical schools' financial aid calculations. They will consider your 2014 income as "up for grabs", even if you contribute 100% of it to Roth IRA/401k accounts. Ask on the Personal Finance subreddit forums for more educated & helpful advice than what you will find here on SDN.

Putting money in a retirement account and then borrowing living expenses at a higher % is just plain dumb. At minimum wage OP is barely gonna make enough to put him over the poverty line let alone have any significant EFC on FAFSA. Besides even if your EFC is not zero med schools will still offer you the full cost of tuition in loans. If you qualify for a grant on the basis of merit your tiny albeit non-zero EFC won't make a difference.