UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Re: IRAs - too late? Date: 2/11/2004 2:06 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Because IRAs require mandatory distributions beginning at age 70-1/2--not that far away, you might want to consider carefully whether an IRA offers you enough advantages. You need earned income to qualify. If you have it and you are below the income limits, a Roth IRA might be preferable. With it after 5 years you avoid any further income tax requirements.

The other alternative is Long Term Buy and Hold investing. LTBH in the Foolish lingo. By selecting the right investments, you avoid income taxes while you hold the investment. You pay income taxes only when you sell (or on small dividends etc) and then only at capital gains rates.

Most IRAs these days are indeed self directed. An IRA at a discount broker gives you freedom to choose your own investments and buy and sell as you see fit. A taxable account in the LTBH style would be similar, though the LTBH aspect would limit your sales to minimize taxes. Mutual fund accounts similarly would allow you to make your own choices.

Best of luck to you.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement