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Just wanted to be 100% certain. I can buy and sell stocks/funds inside my Roth IRA w/o incurring any taxes, yes or no? I'm not really sure. I'm thinking yes but then there's that 5 year rule, and i've not had it for 5 years so not sure if can get out of one fund and into another inside my Roth or not? thanks
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Yes, you're entirely correct. You can move around your assets within the Roth however you like completely free of any taxes or penalties. The 5-yr rule is only for actual withdrawals. As long as you keep everything within the Roth, it's not applicable to your situation. -
Yep yep! That's why I trade stocks in my Roth.
Although, that being said, if one was not into trading stocks or ETFs, the Roth would be better suited for conservative investments that pay a dividend. That's because you would not end up paying income tax for the dividend payouts as well, upon withdraw.Comment
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Ok thanks..I just wanted to make sure. I also heard on Suze Ormans show that you should put bond funds into a IRA vehicle...so I think i'm going to roll some of my taxable accounts into a roth for my contribution this year. Thanks alot!!Comment
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That's correct, bond funds (or anything that throws off regular and/or large dividends) are great for a Roth IRA, because those dividends will not be taxed upon taking them out of the Roth. Keep in mind, though, that's only the case for Roth IRAs--deductible IRAs (which are contributed to with pre-tax money) are taxed upon withdrawl, which would include those dividends.Originally posted by Thrif-t View PostComment
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