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Author: Edlbym One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: RIA? Impossible? Date: 7/16/2010 12:02 AM
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Ok this may be a crazy question but bear with me..

1. If you have 100k in a Roth, you can

A. Take all the money out, and put it into a money market account, and take out monthly amounts from that MM but I'd have to pay taxes.

B. Instead if you keep your 100k in your Roth account but invest it, within that Roth account in a MM, then you can continue to take out monthly amounts and this time not have to pay taxes.

2. A. If you take all the money out of your Roth and put it into dividend paying stocks, you can get monthly income from those dividends, but you'd pay taxes
B.If instead you could keep that money in your Roth account invested in dividend paying stocks, and as you earn dividends, take out monthly amounts and not have to pay taxes.

And the same A. versus B. could be said of REITS or even other things you can buy which track or index other investments..Now my question is

3. We could

A. take our 100k out of a Roth and use that 100k to buy an immediate annuity and we'd have a guaranteed income for life (or for an agreed upon number of years) but we'd pay taxes.

B. what goes here under 3B? You can buy things that are indexes, track commodities, or are real estate, the same way as if you were buying the stock of one company, all while staying inside the tax protection of the Roth...is there a way to do that with an immediate annuity, getting those monthly guaranteed checks deposited into your Roth from which you could withdraw without any tax.. a Roth Immediate Annuity (RIA).

.is that so crazy? After all, you can do that for dividends from stocks, REITs, bond funds, money market, some commodities (not all, I realized some you actually have to pay taxes on, scheduleK, even though it' in your Roth, but in most cases, no) ...so why not be able to buy a hypothetical symbol, VLIA (Vanguard Life Immediate Annuity) share class" would be "53" if you're 53 years old, and it deposits guaranteed amounts into your Roth the way an index fund paying dividends or a mutual fund with dividends, would deposit those into your Roth, only it's guaranteed, and, all tax free like anything else that is inside your Roth (whether you deposited it or it accrued to you somehow else) .Is there an obvious way to do this?

If not, anyone want to invent/create one? :-)

Thanks for your comments (please be kind!) on this crazy(?) question,
edlbym
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