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Author: MJOKRUSE Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75793  
Subject: IRA Date: 6/9/2000 11:30 PM
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I do not qaulify for the ROTH IRA. My question is if it is worth parking $2000 a year in a traditional IRA and loosing the flexibility to have access to this money if I need it in an emergency. I plan to buy top quality stocks and hold on to them. I know I would loose the tax advantages offered through an IRA, but don't know if it's worth loosing access if needed.

BPK
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Author: BookmFool Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22474 of 75793
Subject: Re: IRA Date: 6/10/2000 1:33 AM
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I do not qaulify for the ROTH IRA. My question is if it is worth parking $2000 a year in a traditional IRA and loosing the flexibility to have access to this money if I need it in an emergency.

Before you start looking to invest in IRA's, it seems you may want to get an emergency fund set up first. Fools usually recommend anywhere from 3-6 months salary stashed away in a money market mutual fund or a CD. Once you have that amount setup and there for you if an emergency should occur, you'll be able to invest with money you won't need to get your hands on for atleast 5 years. Investing money should never be considered emergency money, because when you consider the volatile swings of the stock market, what you put in a stock, may not be there if you need it in 6 months. But cash in a money market mutual fund, while not guaranteed, (it's the next best thing), won't suffer the wild movements of stocks. And they're a safe bet you'll have available what you put in (while earning around 5%).

Last item to remember, these savings vehicles are IRA's - Individual Retirement Accounts. Let them serve their purpose, while the MM fund does its job as well, and you'll be laughing all the way to you vacation home in Belize (or at least to your award-winning garden in your back yard).

HTH

BmF

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Author: AlyKat Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22477 of 75793
Subject: Re: IRA Date: 6/10/2000 8:42 PM
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One advantage of even a non-deductible IRA is that you won't pay any capital gains taxes if you sell any stocks/mutual funds while they are in the IRA (I'm not talking about withdrawing money from the account). You won't pay taxes until you withdraw the money from the IRA. There are some advantages to tax-defered growth. If you think you might be in a lower tax bracket once you retire you might want to look into a non-deductible IRA.

I hope this helps.

~aly

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22524 of 75793
Subject: Re: IRA Date: 6/13/2000 11:04 AM
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If your stock picks are so good that you buy and hold and never sell, then a Traditional IRA is a bad deal. It's better to go with a taxable account, so your gains will be taxed at your capital gains tax rate (20% or lower). With a traditional IRA, your gains are taxed as income -- as high as 39.6%.

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