Best Online Brokerage?

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GWestphal

Golden Member
Jul 22, 2009
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There are big ones and small ones, cheap and expensive. Which to choose? Diversify and have a couple accounts?

I'm currently thinking a TD Ameritrade Roth IRA and an OptionsHouse indiviual account. That way I can toss 5500/yr into the Roth IRA and get access to the tools. Then I can put unlimited money in the individual account and trade ETFs and stocks cheaper.

The other thing though is that I am approaching the single income limits for IRA contributions. So likely I'll only be able to contribute to the IRA for less than 5 years, so maybe an IRA isn't even worth it if I'll only be able to put 25k into it.

If you know the basics are the tools that come with TD Ameritrade worth it? Or can you get most/more of it from forums and other websites for free.
 

dr150

Diamond Member
Sep 18, 2003
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1.) TDA is worth it for the over 100 free ETFs you can choose to fund the IRA, including the ultra cheap Vanguard funds like VTI. This will save you $$$ over the years in trading fees saved. Remember to enroll in the program (which is free) when creating a TDA account, otherwise you'll see a trading fee on those free ETFs.

2.) It doesn't matter if you hit your IRA income limit. Take advantage of the backdoor. You can transfer money to a non deductible IRA every year (regardless of income), then into a ROTH. All you have to do is fill out a ROTH Conversion Form on the Ameritrade website. Remember you must first fund a regular IRA, then do the transfer to ROTH. It's a two step process, but it must be done this way to do it correctly. Keep in mind you'll have to pay yearly taxes up front on that $5.5k, but then it's tax free for the life of the account.

Look up old threads here and on Bogleheads forum to learn the benefits of ROTH Conversions for high income earners.
 
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