I am very new to fooldom. I have an IRA that is a rollover account from a previous employer. It currently has about $3500. It is at a bank earning 2% interest with a yearly fee of $18. It is time to move it. I am not planning to add any more to it now because my present employer matches 100% in my 401k. I am currently calling OLBs and requesting information packages for regular brokerage account and IRA accounts. The person I talked to at E-Trade said that if I invest in stocks in an IRA any gains would not be taxable. However, if the account loses money I would be taxed for early withdrawal. Therefore I should probably put my money in mutual funds. That doesn't make sense to me. Mutual funds can lose money too. Maybe Mutual funds are the way to go because of the small size of the account. Any advice would be appreciated.
Greeings, Agrahamar, and welcome. You asked:<<The person I talked to at E-Trade said that if I invest in stocks in an IRA any gains would not be taxable. However, if the account loses money I would be taxed for early withdrawal. Therefore I should probably put my money in mutual funds. That doesn't make sense to me. >>As well it shouldn't make sense, too, because it is untrue. A loss is not considered a withdrawal. The agent you spoke to must have been smoking some pretty funny stuff to come up with that one. He or she had no idea what they were talking about. As you pointed out, mutual funds can lose money, too. Let that piece of advice go in one ear and out the other.Regards..Pixy
No expert, but..look to one of the brokerage houses to offer roth ira. Actually, go to rothira.com ... get info there..If you pay tax on the investment(initially), your future growth may not be taxed..In terms of what to invest.. I would put all $3500.00 in the techs at nasdaq symbol QQQ.. (this is similar to a mutual index)Of course, all depends on your tax bracket, etc.. when you retire.. If you don't go roth..
For a $3500 IRA account, you do have the option of going to a major mutual fund company such as Vanguard, establishing an IRA or Roth IRA account directly with them and investing in an index fund. Usually their fees will be lower than you will pay at brokerage houses for similar services.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |