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|Subject: Re: A few IRA questions||Date: 9/11/1999 8:54 PM|
|Author: FoolishLikeaFox||Number: 13855 of 77407|
I am setting up a Roth IRA. If you are buying stock, I assume you have to keep the purchase below $2000 per year. So after buying the amount of shares that add up to an amount below $2000 you would always be contributing a little less than the full amount.
No, you don't contribute stock to an IRA, only cash, up to the maximum contribution you're allowed. You buy the stock within that account. All transactions, including dividends, splits, interest, and transaction fees take place within that account in glorious isolation from the "real" world.
Also, how do you use a money market sweep account associated with IRA to accumulate money for stock purchases? Is it considered contribution?
The "sweep" is taken care of automatically by the broker (Actually the broker's computer) who puts any cash lying around in the account into whatever kind of fund (Usually MM) you've chosen from among those offered by the broker. Since this cash was already in the IRA as either contributions or earnings, not as new contributions. Think of the IRA as consisting of the entire brokerage account. As such, it's just like your taxable brokerage account except that any money taken out or put in is subject to the rules for that type of IRA.
I can't find anything that makes this stuff clear to me.
I've had trouble running down specific information at the Fool, too, till I realized that the key to the labyrinth is in the help link at the right of the tabs on the front page. It has links to FAQs, Archives, Site Index, a Search engine, and a Site Map.
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