Original:<<Can a Roth IRA be self-directed? If so, would it make any sense to set up DRIPs in each of the Foolish Four as the investments in this self-directed Roth?>>TMF Pixy:<<Yes, a Roth can be self-directed. Any broker can help you set up the account. However, establishing a DRIP for each stock therein may be difficult. I know of no company that has a DRIP option that will do so within an IRA, let alone a Roth. Some brokers (USAA is one) will allow no-fee reinvestments in stocks if the broker has holdings in that stock. They simply make a bookkeeping entry at the current market value to sell you the full/fractional shares involved out of that broker's inventory. Most, though, simply collect the dividends as cash and put it in the money market sweep account within your IRA.>>As a follow up, if I take the funds in that sweep account and invest them within the IRA, but not necessarily in the same stock, is that considered a new contribution that impacts the annual $2,000 limit? Or is it ignored in terms of the annual contribution limit because I'm using the IRA earnings within the IRA, and not adding money from my pocket?(I think I know the answer; just making sure...)
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