Does reinvesting dividends/capital gains in an IRA count?

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Does reinvesting dividends/capital gains in an IRA count?

Postby JustinR » Sun Sep 01, 2013 8:23 pm

Do reinvestments of dividends and capital gains count as a contribution in your Roth IRA? If you've already contributed the max for the year, and more is auto-reinvested by Vanguard during the year, what happens?

On a similar note, does reinvesting dividends/capital gains automatically from OTHER funds count as contributing?
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Re: Does reinvesting dividends/capital gains in an IRA count

Postby livesoft » Sun Sep 01, 2013 8:28 pm

no, reinvesting distributions does not count towards contribution limits.

if you have non-ira account funds auto-invest in your IRA, then that's a contribution.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Does reinvesting dividends/capital gains in an IRA count

Postby masteraleph » Sun Sep 01, 2013 8:28 pm

1) No. The money is all within your IRA, so it's not a contribution.

2) Again, if the money is within the IRA, it's not a contribution.
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Re: Does reinvesting dividends/capital gains in an IRA count

Postby JustinR » Sun Sep 01, 2013 8:35 pm

livesoft wrote:if you have non-ira account funds auto-invest in your IRA, then that's a contribution.

Thank you. If I do this (fund my IRA by diverting distributions from my taxable account), I wonder if Vanguard would automatically shut me off at $5500. I plan on topping it off at the end of the year. Does Vanguard keep track of contributions or is that something I have to do myself?

Edit: Never mind. Vanguard doesn't let you do this.
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