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Dear Dr. Don,
I have a Roth IRA with a credit union in New York City. I would like to know, should I keep it there or change to another institution? How do I know which institution has the best rate of return, or does it really matter? Basically, does it really matter where you invest your Roth IRA?
-- Annette Alternatives
 Dear
Annette,
Of course it matters where you invest your Roth IRA. You want to choose a custodian for the account that offers the investment choices you want while keeping fees and expenses reasonable.
Ideally, this Roth IRA is just one part of your retirement portfolio. Keep the big picture in mind when deciding where to hold the account and how the account will be invested. You haven't drawn me your big picture, but investors tend to look for capital gains in these accounts. This is because unlike traditional IRA accounts -- where distributions are taxed at ordinary income rates -- qualified distributions from a Roth IRA are free of federal income taxes.
Several factors should influence how you're invested in this account. They include your attitude toward risk, other sources of retirement income, age and planned retirement date.
Feel free to chase yield in a deposit account insured by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund. However, you should look beyond bank deposits and look at your overall portfolio before you decide where to hold this account.
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