May 6

Okay. If I can only put 5000 into a traditional IRA a year. what if i want to invest more than 5000 dollars into the same fund. can i not just invest more than the 5000 and get no tax break for the additional funds? or do i really need to buy a separate identical mutual fund?


2 comments so far...

  • Wayne Z Said on May 6th, 2010 at 11:13 pm:

    You can invest as much as you want outside of an IRA. I do it.

    You are correct that there is no tax break. In fact any dividends and capital gains will be taxed as earned. I max out my 401k, Roth IRA and still invest more in mutual funds and other accounts. To me, the taxes are a small price to pay for the flexibility to do whatever I want with the money when I want to do it.

    If you really like a fund, you could by it in an IRA and outside the IRA. You would have to open separate accounts though. You can not commingle the money.

  • Derek Said on May 6th, 2010 at 11:24 pm:

    You can invest in stocks and funds outside if the IRA. The max contribution if you’re under 50 is $5,000. You pay regular income tax on traditional IRA withdrawals at retirement.

    That’s why ROTH IRAs are better.

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