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Happy New Year everyone. I'm in my mid-30s, and already have a retirement setup from work.
I'm looking to dabble a little with extra money--I'm not like some wealthy tycoon or anything , but just figure rather than letting it sit in a checking or savings account can do something fun with it instead. I'm ok with a high-risk for this. But all advice seems to point to an IRA. Is the general advice for any extra money to double up on a second retirement account? Are there simple ways of doing stocks such as your Acorns, Betterments, Stashes or RobinHoods? Does having an IRA allow you to do high risk investing of stocks that you choose--and does tax on withdrawals before retirement age kill any gains?
I would not use the IRA. Your losses are not deductible, you have penalties if you take the money out early etc. etc.
I would consider a ROTH IRA as their are no taxes on the gains but again you do not get to deduct the losses. You can take out your original contributions without a penalty. I would consider using a ROTH for long term investing that might last until retirement.
Happy New Year everyone. I'm in my mid-30s, and already have a retirement setup from work.
I'm looking to dabble a little with extra money--I'm not like some wealthy tycoon or anything , but just figure rather than letting it sit in a checking or savings account can do something fun with it instead. I'm ok with a high-risk for this. But all advice seems to point to an IRA. Is the general advice for any extra money to double up on a second retirement account? Are there simple ways of doing stocks such as your Acorns, Betterments, Stashes or RobinHoods? Does having an IRA allow you to do high risk investing of stocks that you choose--and does tax on withdrawals before retirement age kill any gains?
Don’t even think about it, do a ROTH IRA. I say this based on my experienceo making RMD’s for the last 9 years. Call Fidelity or Vanguard and get started.
Hmm, I tend to use tools for the purposes they were intended. An IRA, even a ROTH isn't really "designed" with this in mind. If you want to dabble, respond to markets, be flexible while learning the system, I'd use a brokerage account. You have more options. Or, do both...use the ROTH for a longer term "savings" account and the brokerage to take advantage of the market.
Hmm, I tend to use tools for the purposes they were intended. An IRA, even a ROTH isn't really "designed" with this in mind. If you want to dabble, respond to markets, be flexible while learning the system, I'd use a brokerage account. You have more options. Or, do both...use the ROTH for a longer term "savings" account and the brokerage to take advantage of the market.
You can have a brokerage account within an IRA. I’ve had one for 25 years.
Without really knowing your situation and at the risk of not being helpful at all - here are my ideas:
I would use a double strategy with 50:50 of the spare money you have (really only money you don't need!):
a) buy high yield or high dividend or maybe even high dividend growth. Do this in a normal brokerage account. This will give you immediate rewards which you can either spend or reinvest. I think this is important to stay on track and "because you're worth it" :-) But develop a strategy that works for you and you can stick with.
b) Analyze your current and presumptive retirement tax situations. It really depends if you're better off with a traditional IRA or Roth IRA. Nobody will ever know this better than you yourself (and understand even then there are unknowns). There are older threads on this and I think user Mathjack was quite proficient albeit not being certified for this type of work. It is tricky. For my situation I'm still torn what's better every year, for example.
I would not use the IRA. Your losses are not deductible, you have penalties if you take the money out early etc. etc.
I would consider a ROTH IRA as their are no taxes on the gains but again you do not get to deduct the losses. You can take out your original contributions without a penalty. I would consider using a ROTH for long term investing that might last until retirement.
Otherwise a regular brokerage account.
Alot of people don't have a Roth IRA, so that is an option. A brokerage/taxable account is another option. Years ago, I wouldn't have opened a taxable account due to fear of the stock markets and all its complexities. I opened an taxable account and Roth IRA with Wealthfront in 2017. It's not full throttle into the stock market but I have options and flexibility and can easily move to another brokerage which I might do later this year. The taxable account will provide benefits that a Roth IRA and IRA don't have (which I highlighted).
Don’t even think about it, do a ROTH IRA. I say this based on my experienceo making RMD’s for the last 9 years. Call Fidelity or Vanguard and get started.
agree , go roth . the price of admission is the same as a taxable account but the taxable account is forever taxed and the roth never taxed
You don't 'dabble' with an IRA.
These are fundamental base positions taken seriously.
dabble? high risk? get an Ameritrade account.
But be certain the basics are covered first.
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, but just figure rather than letting it sit in a checking or savings account can do something fun with it instead. I'm ok with a high-risk for this. But all advice seems to point to an IRA. Is the general advice for any extra money to double up on a second retirement account? Are there simple ways of doing stocks such as your Acorns, Betterments, Stashes or RobinHoods? Does having an IRA allow you to do high risk investing of stocks that you choose--and does tax on withdrawals before retirement age kill any gains?
