Roth IRA or Taxable Account

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rksanrmv
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Joined: Sat May 12, 2018 11:18 am

Roth IRA or Taxable Account

Post by rksanrmv » Tue May 15, 2018 12:51 pm

I have enough money each month to either put money in a taxable account or start a new Roth IRA...what is the best strategy?

My wife and I already each have Roth IRAs and my wife has a traditional IRA.

PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: Roth IRA or Taxable Account

Post by PFInterest » Tue May 15, 2018 12:53 pm

Roth IRA wins every time.

mortfree
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Re: Roth IRA or Taxable Account

Post by mortfree » Tue May 15, 2018 12:57 pm

if you already have a Roth IRA, why would you start a new one?

you can only contribute $5500/person to a Roth IRA (plus catchup if over a certain age) and you meet all eligibility requirements.

rksanrmv
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Joined: Sat May 12, 2018 11:18 am

Re: Roth IRA or Taxable Account

Post by rksanrmv » Tue May 15, 2018 1:14 pm

mortfree wrote:
Tue May 15, 2018 12:57 pm
if you already have a Roth IRA, why would you start a new one?

you can only contribute $5500/person to a Roth IRA (plus catchup if over a certain age) and you meet all eligibility requirements.
I thought i could open up multiple and contribute 5500 to all of them. thanks for the clarification.

rksanrmv
Posts: 9
Joined: Sat May 12, 2018 11:18 am

Re: Roth IRA or Taxable Account

Post by rksanrmv » Tue May 15, 2018 1:15 pm

what is the proper asset class to have in a Roth? Bonds, Stock index funds, other?

dharrythomas
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Re: Roth IRA or Taxable Account

Post by dharrythomas » Tue May 15, 2018 1:56 pm

Composition of the Roth accounts would depend on whether you already have a 401(K), a traditional IRA or a taxable account. It should all be considered one portfolio.

I like the LifeStrategy and Target Retirement funds. All index, stocks and bonds, domestic and international.

Good luck.

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FiveK
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Re: Roth IRA or Taxable Account

Post by FiveK » Wed May 16, 2018 1:57 am

See Investment Order and Tax-efficient fund placement for some thoughts on your questions.

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celia
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Re: Roth IRA or Taxable Account

Post by celia » Wed May 16, 2018 4:46 am

rksanrmv wrote:
Tue May 15, 2018 12:51 pm
My wife and I already each have Roth IRAs and my wife has a traditional IRA.
You also need to have EARNED income (wages) that are more than the IRA contribution each year. And the total of the Roth and traditional IRA contributions for each year per person is $5,500 ($6,500 if over age 50 at the end of the year).
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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