Qualified Stock Options purtchased through my Roth IRA
"No, you cannot. ISO are given to you in your capacity as an employee (that's why it is ""qualified""), while your IRA is not an employee. You cannot transfer property to the IRA, so you cannot transfer them to the IRA once you paid for them as well. This is different from non-qualified stock options (discussed in this question), which I believe technically can be granted to IRA. But as Joe suggests in his answer there - there may be self-dealing issues and you better talk to a licensed tax adviser (EA/CPA licensed in your State) if this is something you're considering to do."
There are not as many options here as you fear. If you have no other investments outside this 401K it is even easier. Outside accounts include IRA, Roth IRA, taxable investments (mutual funds, ETF, individual stocks), Employee stock purchase plans. Amount: make sure you put enough in to get all the company match. I assume that in your case the 9% will do so, but check your documents. The company match will be with pre-tax funds.  Roth vs Regular 401K? Most people in their lifetime will need a mix of Roth and Regular retirement accounts. You need to determine if it is better for you to pay the tax on your contributions now or later. Which accounts? If you are going to invest in a target date fund, you can ignore the rest of the options. The target date fund is a mixture of investments that will change over the decades. Calculate which one fits your expected retirement date and go with it. If you want to be able to control the mix, then you will need to pick several funds. The selection depends on what non-401K investments you have. Now here is what I considered the best advice.  Decide Roth or regular, and just put the money into the most appropriate target date fund with the Roth/regular split you want. Then after the money starts flowing into your account, research the funds involved, the fees for those funds, and how you want to invest. Then move the money into the funds you want. Don't waste another day deciding how to invest. Just get started. The best part of a 401K, besides the match, is that you can move money between funds without worrying about taxes. If you realize that you want to put extra emphasis on the foreign stocks, or Mid-cap; just move the funds and redirect future contributions. You can use a Roth IRA for retirement and you can still withdraw all of your contributions at any time. You can also withdraw $10,000 worth of the earnings in your Roth IRA for a first-time home purchase. You can also withdraw for unreimbursed medical expenses and qualified education expenses. Full details are available in IRS publication 590.  There is a limit of $5,500 for contributions in 2016 ($6,500 if you're over 50) as long as your adjusted gross income is below a certain level. You can still make a contribution for the previous tax year until the filing deadline (usually April 15). The most important thing is to keep in mind the deadline. If you want to have it count for 2016, you need to open the account and transfer the funds by tax day. Don't wait until the last day to do it, or you could run out of time. Setting up the initial account, and them verifying your information and transferring the money could take a few days. First decide how much of a lump sum you want to invest  initially. This will determine some of your options because the mutual fund will have a minimum initial investment. Many of the funds will allow subsequent investments to be smaller.  The beauty of a IRA or Roth IRA is that if the fund you want is out of reach for this initial investment in a few years you can transfer the money into another fund or even another fund family without having to worry about tax issues. Now decide on your risk level and you time horizon. Because you said you are student and you want a Roth IRA, it is assumed that you will not need this money for 4+ decades; so you can and should be willing to be a little more risky. As NathanL said an index fund is a great idea. Many also advise an aged based fund. My kids found that when they made their initial investments the age based funds were the only one with a low enough initial investment for their first few years.  Then pick a fund family based on the general low fees, and a large mix of options. The best thing is that in a few years as you have more money and more options, you can adjust your choices. "The backdoor Roth IRA contribution has been possible for a few years now and is fairly widely known. The IRS hasn't said anything negative about it. An answer to my question here mentions that it could hypothetically be disallowed through the ""step transaction doctrine"", although that is the only time I have heard that possibility raised. For some background, the income limit on Roth conversions was removed as a ""revenue-offsetting provision"" of the Tax Increase Prevention and Reconciliation Act of 2005. They want people who have deducted contributions in Traditional IRAs to convert to Roth and pay taxes now rather than waiting many years until retirement. Conversely, people performing the backdoor Roth IRA contribution have already paid taxes on that money and it's just preventing them from having to pay taxes many years later. It's easy to see how Congress would find this a satisfactory exchange." "Taxes are triggered when you sell the individual stock.      The IRS doesn't care which of your accounts the money is in.  They view all your bank and brokerage accounts as if they are one big account mashed together.   That kind of lumping is standard accounting practice for businesses. P/L, balance sheets, cash flow statements etc. will clump cash accounts as ""cash"".  Taxes are also triggered when they pay you a dividend.  That's why ETFs are preferable to mutual funds; ETFs automatically fold the dividends back into the ETF's value, so it doesn't cause a taxable event.  Less paperwork.  None of the above applies to retirement accounts.  They are special.  You don't report activity inside retirement accounts, because it would be very hard for regular folk to do that reporting, so that would discourage them from taking IRAs.   Taxes are paid at withdrawal time (or in Roth's, never.)" One can have a self-directed IRA. This is not like a Schwab, eTrade, etc IRA. It has a special type of custodian that knows how to manage it.  I became aware of such an account as a way to purchase a rental property. There were two issues. The type of property I looked at wasn't anything a bank was willing to finance. And the rules regarding self dealing added a potential layer of expense as I technically could not perform the simplest of things for the property.  For you, the obstacle looks like self-dealing. Any IRA can only be funded with cash or transfer/conversion from another IRA/401(k). I don't know how you would get the intelligent property into the IRA in the first place. Once you own a patent, or anything else, you can't sell it into the IRA.  It's at times like this that member littleadv would suggest this is the time to talk to a pro before you do anything hazardous to your wealth. Your question indicates confusion regarding what an Individual Retirement Account (whether Roth or Traditional) is vs. the S&P 500, which is nothing but a list of stocks. IOW, it's perfectly reasonable to open a Roth IRA, put your $3000 in it, and then use that money to buy a mutual fund or ETF which tracks the S&P 500. In fact, it's ridiculously common...  :) 1) Why wouldn't I be able to contribute to an IRA if it is taxable? Since I am spending the stipend on living expenses, shouldn't it count as income and thus make it eligibile for an IRA? Not any income is eligible for an IRA. Only earned income (compensation) is eligible. From the link - see the second bullet item: For 2015 and 2016, your total contributions to all of your traditional and Roth IRAs cannot be more than: In your case this is not an earned income, since you haven't performed any work. You promised to perform work in the future, but you'll get paid for that work separately. This income is taxable, but doesn't qualify for the IRA. If you have any other earned income, you can use the stipend funds to make the actual deposits, and use that other earned income for calculating the limits.