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Title change: personal investment questions (401k rollover, Roth).
Posted on 9/3/13 at 8:15 pm
Posted on 9/3/13 at 8:15 pm
if you can withdraw your invested dollars from the roth at any time with no penalty but have to wait until a certian age to withdraw the interest without penalty why not just invest in mutual funds?
This post was edited on 9/5/13 at 1:11 pm
7
Posted on 9/3/13 at 8:17 pm to Coon
Roth is a vehicle. Not a fund
Posted on 9/3/13 at 8:19 pm to Coon
I don't understand your question.
A Roth is just a tax shield.
You can put mutual funds in it of you wish and most do.
And that aside...
Lets see.
On one taxes on dividends and any turnover in the fund are incurred, as well as any capital gains taxes on share sales.
In the other, you never have to pay taxes again on anything.
Pretty big difference if you ask me.
A Roth is just a tax shield.
You can put mutual funds in it of you wish and most do.
And that aside...
Lets see.
On one taxes on dividends and any turnover in the fund are incurred, as well as any capital gains taxes on share sales.
In the other, you never have to pay taxes again on anything.
Pretty big difference if you ask me.
This post was edited on 9/3/13 at 8:20 pm
Posted on 9/3/13 at 9:28 pm to Coon
OP, you're confused about something here.
A Roth is simply a kind of account with special rules. It is not an investment holding, like a stock or mutual fund. It's an account, much like a checking account, brokerage account, 401(k), etc. Once you put money into the account, you can choose what to invest in.
For example, you could compare a Roth vs. a traditional IRA vs. a 401(k) vs. a brokerage account. Each of these is a kind of account with different tax rules.
You could invest in a mutual fund (or something else too, for that matter) in any of these different accounts.
A Roth is simply a kind of account with special rules. It is not an investment holding, like a stock or mutual fund. It's an account, much like a checking account, brokerage account, 401(k), etc. Once you put money into the account, you can choose what to invest in.
For example, you could compare a Roth vs. a traditional IRA vs. a 401(k) vs. a brokerage account. Each of these is a kind of account with different tax rules.
You could invest in a mutual fund (or something else too, for that matter) in any of these different accounts.
Posted on 9/3/13 at 10:38 pm to Coon
Because you have to pay taxes on your gains in a non IRA account. You seem to be a bit confused.
Posted on 9/3/13 at 10:48 pm to Coon
Taxes
Posted on 9/3/13 at 11:10 pm to Joshjrn
quote:
Because you have to pay taxes on your gains in a non IRA account. You seem to be a bit confused.
You seem a bit confused. Taxes have to do with the type of account, yes, but have nothing to do with how you invest the funds.
Posted on 9/4/13 at 7:53 am to Coon
Posted on 9/4/13 at 9:23 am to foshizzle
quote:
You seem a bit confused. Taxes have to do with the type of account, yes, but have nothing to do with how you invest the funds.
The OP asked why would he use a Roth IRA as a vehicle instead of just investing in mutual funds outside of a Roth. That's what I answered. I have no clue where you got the idea that I was saying that the specific investment itself would have an impact on the tax treatment.
Posted on 9/4/13 at 12:59 pm to Joshjrn
I know an ira is a vehicle and mutual funds are investments.
So with a Roth you pay taxes on the money before you invest it and never again on any gains whereas with a mutual fund you pay taxes on the money before you invest is AND the cap gains?
So with a Roth you pay taxes on the money before you invest it and never again on any gains whereas with a mutual fund you pay taxes on the money before you invest is AND the cap gains?
Posted on 9/4/13 at 2:18 pm to Coon
quote:
So with a Roth you pay taxes on the money before you invest it and never again on any gains whereas with a mutual fund you pay taxes on the money before you invest is AND the cap gains?
Pretty much. But it's taxed at ordinary income.
Posted on 9/4/13 at 2:20 pm to Broke
Unless you help it for more than a year....
Posted on 9/4/13 at 3:46 pm to Coon
quote:
if you can withdraw your invested dollars from the roth at any time with no penalty but have to wait until a certian age to withdraw the interest without penalty why not just invest in mutual funds?
Because with a mutual fund you get taxed on the growth
With a Roth you don't get taxed on the growth
Posted on 9/4/13 at 4:05 pm to Powerman
quote:
Because with a mutual fund you get taxed on the growth With a Roth you don't get taxed on the growth
Thanks powerman, that's all I was asking.
Posted on 9/5/13 at 12:42 pm to Coon
Changing the title... So I have two old 401k's (one with Ing and one with vanguard). What are te positives and negatives of rolling them over somewhere?
I'd also like to open an Ira because I want to put more away than the allowable max my new company offers. I think I would rather a Roth. Everyone here talks about vanguard so I'm leaning that way, any reason not to?
Fwiw, I'm a passive investor. While I do check my balance from time to time, I don't move money around.
I'd also like to open an Ira because I want to put more away than the allowable max my new company offers. I think I would rather a Roth. Everyone here talks about vanguard so I'm leaning that way, any reason not to?
Fwiw, I'm a passive investor. While I do check my balance from time to time, I don't move money around.
This post was edited on 9/5/13 at 1:11 pm
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