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Hello all,

I just got a reply from Waterhouse that fees for
trading must come from the funds in the IRA acct
and cannot be paid from outside of the IRA acct.

I was hoping to keep _all_ my eggs in the basket
and not have the fees take away from that growth. :)

I, being the conservative that I am, cannot think
of a very good reason why this is so. Does anybody
have information on why the IRA trade fees have to
come from the acct funds? Is it big brother gov't talking to us? Is it just Waterhouse policy?

Thanks and Regards,
Mike
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<<Does anybody have information on why the IRA trade fees have to come from the acct funds?>>

Its the law.

Otherwise, you would be able to effectively get around the $2000/year contribution limits, since fees & commisions are essentially additional contributions to your retirement account.
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<<Does anybody have information on why the IRA trade fees have to come from the acct funds?>>

Its the law.

Otherwise, you would be able to effectively get around the $2000/year contribution limits, since fees & commisions, if you could pay them separately, would be additional contributions to your retirement account.
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<<Does anybody have information on why the IRA trade fees have to come from the acct
funds?>>

A well-picked no-load mutual fund gets all your dollars working for you. I have been very pleased with American Century Ultra over the long haul. The Fools may have something to say about that, though.

Getting more foolish every day,
MAC
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>> A well-picked no-load mutual fund gets all your dollars working for you. I have been very pleased with American Century Ultra over the long haul. The Fools may have something to say about that, though.
---------------
Not exactly true. Really, completely untrue.

First of all, mutual funds pay trading fees - HIGH trading fees since they trade through full-service brokers and justify this by saying that the brokers provide necessary research data - all the time, and most of them trade MUCH more than any individual. "Churning" is a good term for most fund managers. The fees come directly out of the returns before any of the fund's shareholders see a penny.

Second, the mutual-fund company charges a management fee that is deducted automatically and which cannot be paid from outside the account. Some companies also charge 12b-1 fees, which effectively force the current shareholders to pay the cost of recruiting new shareholders. (Or to repay the fund for a sales fee that it didn't collect originally.)

Third, mutual-fund IRAs always have a bank as a custodian, and the bank will charge a custodial fee every year. The law allows this to be paid from outside the account, but some of the companies don't go out of their way to tell the shareholders how to do it.

In contrast to this, it's possible to establish a no-fee IRA with a discount broker where you yourself control exactly how many trades are made in your account.
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