Investment 101

[LuckyTaxi]

Ok common sense says to max out 401k then IRA. However, I have a problem with not being able to touch my money until I retire. Right now I'm socking away $100 month towards ETFs in my sharebuilder account. The thinking is, let's say 10-15 yrs from now, I can pull that money out and pay capital gains taxes. Whereas with IRA I can't touch until I'm 59!

My thinking is, I would like to make money while it's sitting idle in an account. If I really need it, I can pull it out w/o penalty.

 

[JS80]

Originally posted by: LuckyTaxi
Ok common sense says to max out 401k then IRA. However, I have a problem with not being able to touch my money until I retire. Right now I'm socking away $100 month towards ETFs in my sharebuilder account. The thinking is, let's say 10-15 yrs from now, I can pull that money out and pay capital gains taxes. Whereas with IRA I can't touch until I'm 59!

My thinking is, I would like to make money while it's sitting idle in an account. If I really need it, I can pull it out w/o penalty.

404 point of post not found

 

[Jadow]

With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

 

[Ns1]

IRA = tax benefit, your idea = no tax benefit

 

[JS80]

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

What if Congress enacts a law that taxes your retirement accounts?

 

[Mxylplyx]

You fail investment 101. An IRA grows tax free, which means HUGE tax savings when we retire, especially since we'll probably be taxed fifty cents on the dollar to prop up the socialist government we'll likely have.

 

[LuckyTaxi]

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

cha-ching! but i guess if that were the case i have nothing to worry about.
my point is let's say I needed it for medical emergency or something.

 

[Mxylplyx]

Originally posted by: JS80

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

What if Congress enacts a law that taxes your retirement accounts?

Then they'll be lucky to finish their 4yr term before being booted out of office

 

[Mxylplyx]

Originally posted by: LuckyTaxi

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

cha-ching! but i guess if that were the case i have nothing to worry about.
my point is let's say I needed it for medical emergency or something.

You can draw on IRA's early to pay for medical and higher education expenses.

 

[Jadow]

Originally posted by: Mxylplyx

Originally posted by: JS80

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

What if Congress enacts a law that taxes your retirement accounts?

Then they'll be lucky to finish their 4yr term before being booted out of office

More like they'll cause a tax rebellion of a bunch of old fogies. If they try to screw me after all these years of saving (govt loves to screw responsible people over), I'll rise up.

 

[LuckyTaxi]

what the hell - trowe price is $12.95 a trade for IRA. So I'm paying $12.95 a transaction and you guys booed me for paying $4 at sharebuilder?

 

[JS80]

Originally posted by: Mxylplyx

Originally posted by: JS80

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

What if Congress enacts a law that taxes your retirement accounts?

Then they'll be lucky to finish their 4yr term before being booted out of office

But we live in a democracy, where 51% of the people can vote to steal from the 49%. What if the majority of the people don't have retirement accounts and want a piece of the action? What if Social Security blows up and government needs new source of funding? What if Obama becomes president and has a Democratic Congress? Oh shit...

 

[InverseOfNeo]

Also, IIRC you can pull money out of the Roth to buy a home.

 

[LuckyTaxi]

What's the difference between using a company such as vanguard/trowe as supposed to td ameritrade and sharebuilder?

 

[JS80]

Originally posted by: Jadow

Originally posted by: Mxylplyx

Originally posted by: JS80

Originally posted by: Jadow
With a RothIRA, later on if you need it, you can take the principal back out without penalty. I would advise against this, but you can do it.

I agree not having the money sucks, but you get a real tax benefit from it. What would suck the most is to die right before you can start taking it out!

What if Congress enacts a law that taxes your retirement accounts?

Then they'll be lucky to finish their 4yr term before being booted out of office

More like they'll cause a tax rebellion of a bunch of old fogies. If they try to screw me after all these years of saving (govt loves to screw responsible people over), I'll rise up.

What if Obama bans guns and you can't run an effective rebellion?

 

[blipblop]

Originally posted by: LuckyTaxi
What's the difference between using a company such as vanguard/trowe as supposed to td ameritrade and sharebuilder?

You're able to purchase their funds for cheaper. If you have an account at Vanguard, you're able to buy the fund without any costs if you meet the minimum $3000 requirement for most.

I have funds at various institutions to purchase their funds, then I have accounts at thinkorswin and InteractiveBrokers to trade my stocks/options/etc.

The transaction price to buy a stock for Vanguard is $30 dollars I believe(So that's why you have it somewhere else, only have an account there to buy their fund)

 

[LuckyTaxi]

Originally posted by: blipblop

Originally posted by: LuckyTaxi
What's the difference between using a company such as vanguard/trowe as supposed to td ameritrade and sharebuilder?

You're able to purchase their funds for cheaper. If you have an account at Vanguard, you're able to buy the fund without any costs if you meet the minimum $3000 requirement for most.

gotcha, other than that, i can buy the same funds from any broker (take into consideration fees and any requirements)

 

[blipblop]

Originally posted by: LuckyTaxi

Originally posted by: blipblop

Originally posted by: LuckyTaxi
What's the difference between using a company such as vanguard/trowe as supposed to td ameritrade and sharebuilder?

You're able to purchase their funds for cheaper. If you have an account at Vanguard, you're able to buy the fund without any costs if you meet the minimum $3000 requirement for most.

gotcha, other than that, i can buy the same funds from any broker (take into consideration fees and any requirements)

yep, that's correct

 

[LuckyTaxi]

i take it this isn't like a 401k where i deposit $100/month and allocate it between various funds w/o being charged?
t-rowe is $12.95/transaction, sharebuilder $4/transaction

 

[her209]

Investment 101

Lesson 1: Buy Low
Lesson 2: Sell High
Lesson 3: ...
Lesson 4: Profit!

 

[dionx]

at least use zecco over sharebuilder. after $2500, you get free trades each month, so you'd save $4 from sharebuilder.

 

[imported_Lothar]

Originally posted by: dionx
at least use zecco over sharebuilder. after $2500, you get free trades each month, so you'd save $4 from sharebuilder.

Zecco for IRA?
I don't know about that...