What is the best source for starting a retirement account?

Im in my early twenties and I just started working after finishing school, but I do want to start a retirement account. What source or foundation should I use for a retirement account? Im pretty dumb in this area. Is a savings account through a company like ING Direct bad for a retirement account?

Public Comments

1. There are alot of things to consider when establishing a retirement account. What types of investments are offered, various fees (annual, transaction, maintenance, fund/investment fees, 12b-1, etc). Alot of the major investment companies have great information on their websites or information they can mail to you. I also suggest filling out investment questionaires to find out your risk level so you can make wise choices and not investing in securities because 'everyone else is doing it'. You can even find info at your local bank.
2. A savings account is not a good retirement account because you cannot get the tax benefits. Open an IRA through fidelity. Try http://www.greatmoneyinfo.com for help picking which funds to put your money into. (If fidelity is not convenient, you can open an IRA through just about any bank)
3. If you are in your early 20's and just started working the first thing I would suggest for starting your retirement account is your 401k at work. If they offer one, make sure you are taking full advantage of it and any company match you are entitled to. Company matches are like free money with no risk. If your 401k offers good investment choices then I would recomend that you max that out (currently 15,000) before you look anywhere else. After that you should look at a Roth IRA if you qualify. It gives you no immediate tax deduction, but you don't have to pay taxes on the growth in the account and when you withdraw the money in retirment you don't have to pay any taxes on the withdrawals either. If your 401k offers a Roth 401k option it is also a good idea to split your contributions between the Roth and traditional 401k plans so that you have different pools of money in retirment that you can access with different tax situations. As for how to invest. Since you are so young you have the time frame to be a little more aggressive if you want. I still wouldn't recommend 100% stocks to you but somewhere around 80% stocks and 20% bonds will let you take advantage of market run ups, but still have some protection in market downturns (especially if you do automatic rebalancing in your 401k). In the stocks (or stock mutual funds) you should look for a good cross section of us and international companies...probably about 20-25% international depending upon your comfort level to risk and volatility...and you should also have a good mix of large, mid, and small US companies....somewhere around 30 large, 10 mid, 5 small.....those are just vague figures....kind of a rule of thumb starting point....every situation is unique and you should really talk to a financial advisor about your situation, time frame, goals ....etc...this is a good general retirement plan, but you need to make sure that it works along with all of your other financial needs
4. Open a brokerage account at Zecco.