Mar 19

Question by brewbeer212: What is the difference between a Roth IRA/IRA and mutual funds?
Isn’t an IRA or Roth IRA just a bunch of mutual funds or should I go to Investing 101?

Best answer:

Answer by KC
Go to investing 101. It will explain this and a lot more. You need to understand some of these basics so you don’t toss and turn in your sleep worried about your retirement.

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4 comments so far...

  • Chip Said on March 19th, 2011 at 6:46 pm:

    A Roth IRA is a specific type of IRA. They are a great deal. Any earnings you make are tax free. If you turn 63 and your roth is worth $ 3 million, it’s all yours- NO Capital Gain TAXES…the entire $ 3 mil is all yours! With a Roth IRA you can invest in mutual funds. Your financial advisor will help you select a high performing funds. Invest the most you can each month to your IRA. It will pay off in the long run.

  • Rob D Said on March 19th, 2011 at 7:40 pm:

    An IRA, be it a Roth or traditional, is not an investment vehicle. It is simply a tax-deferred shell which can contain virtually any type of investment, to include mutual funds, stocks, bonds, or even real estate. About the only thing you can’t put into an IRA is life insurance.

    It is best to contact a financial advisor or planner who can counsel you on your specific situation. Many can be found who will assist you at no cost.

  • equityhawk Said on March 19th, 2011 at 7:54 pm:

    Yep, you’re Investing 101 material and so are a million other people! The good news is that you are smart enough to ask the right question. An IRA ***of any kind*** is nothing but a retirement account designed to defer earned and unearned income until you are eligible to make withdrawals. In other words, it’s an empty shell until you put something in it. So, what can you put into an IRA? The average investor invests in stocks, bonds and mutual funds. The majority of wage earners invest in funds. More experienced investors buy stocks, bonds, options contracts and real estate in theirs. Check out the IRS website for complete information on this subject.

    Mutual funds are investment companies that buy stocks and bonds with the objective of making a profit. You can invest in a mutual fund with money that is deposited in an IRA or in a regular taxable account. If the fund is not sheltered in a retirement account, the income and capital gains are subject to personal taxes during the year when the gains took place. The IRA protects your gains from being taxed. You pay taxes on any income you receive, starting at age 59 1/2.


  • Said on March 19th, 2011 at 7:58 pm:

    Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.

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    Good Luck and Best Wishes!

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