Somewhere in this maze of Foolish pages, a comment was made about not being eligible for reg. IRA contributions if you don't have reg. earnings. That being the case, is a Roth IRA available, or is there a better suggestion for opportunities to grow available nest egg cash?Ideas gratefully accepted!DreadMenudo
Greetings, PhilD123, and welcome. You wrote:<<Somewhere in this maze of Foolish pages, a comment was made about not being eligible for reg. IRA contributions if you don't have reg. earnings. That being the case, is a Roth IRA available, or is there a better suggestion for opportunities to grow available nest egg cash?>>You will find the details on IRAs in our IRA area at http://www.fool.com/Money/AllAboutIRAs/AllAboutIRAs.htm. Both the Roth and the traditional IRA require earned income for contributions. Earned income is generally income that you receive from working as compensation for your labor in one form or another. It's reported to you on a W-2 form (or sometimes a Form 1099-MISC for the self-employed), or you file Schedule C (Business Income) with your normal tax return. Earned income generally does not include Social Security benefits, pensions, interest, dividends, rental income, or capital gains. No income, no IRA contribution. That leaves a taxable investment account or a (yuk!) tax deferred annuity/life insurance product.Regards..Pixy
In order to make contributions to any form of IRA, you gotta have "earned" income. If you are looking for another vehicle, why not try the LTBH (long term buy and hold) strategy of stocks, in which case taxes are not due on any gains until the stock is sold. If you are not comfortable with picking your own stocks, you could try the Foolish Four strategy or the RP4 strategy for mechanical stock picking; or if you still do not like that much work per year (15-30 minutes) find a good index mutual fund such as Vanguard's indexed fund. Choosing to go with the mutual fund however, you will have taxes on the dividends (you have this with stocks too) and capital gains annually. many choices are out there, you just gotta read and make a decision as to what is best for you.jenn
As jkrou pointed out, several strategies are available to minimize taxes in a taxable account. Foolish Four tends to generate higher taxes due to annual changes in the stock position. Index funds tend to geneate low capital gains compared to large cap mutual funds due to lower stock turn over. Tax managed mutual funds can offer very low taxes.
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