Why would I want to open an IRA?

[TheMetetron]

I started a thread in the Stock Market forum to hopefully get some better answers.

I don't qualify for a Roth IRA, as I make too much.

Also, as a 60 year old, I don't anticipate making less than I do today. If I do, I screwed something up.

I'm fairly certain if I put my investment into a mutual fund or some other stock/bond account, I don't have to pay taxes until I withdraw (capital gains at 15% of the money earned) so compounding isn't an issue. It seems like with a traditional IRA my earnings are taxed at my income tax rate.

I understand it's tax-free now and all that... but having to hold onto the money until I'm 60 with no leeway for investing it somewhere else (house, business, etc) seems like too high of a price to pay for very little benefit.

Anyways, respond in Stock Market if you have any further thoughts.

[TStoneMBD]

im pretty sure if its a self directed IRA that you can buy a house with it. it might have to be a rental property/flipping deal though im not sure. you can also borrow against the self directed IRA. if you borrow against it at like 6% interest and youre making 10% interest on the money in your IRA youre actually making 4% profit on your money while being able to spend it ahead of time. you could basically borrow against your IRA to buy a house and your interest in the IRA could excede your mortgage loan.

[Sniper]

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I'm fairly certain if I put my investment into a mutual fund or some other stock/bond account, I don't have to pay taxes until I withdraw (capital gains at 15% of the money earned) so compounding isn't an issue.

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A mutual fund will generally throw off taxable capital gains and dividends every year.

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I understand it's tax-free now and all that... but having to hold onto the money until I'm 60 with no leeway for investing it somewhere else (house, business, etc) seems like too high of a price to pay for very little benefit.

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Your IRA is an asset that you can borrow against!

I've also responded in the stock market forum with a bunch of links to more info.

[BigF]

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I'm fairly certain if I put my investment into a mutual fund or some other stock/bond account, I don't have to pay taxes until I withdraw (capital gains at 15% of the money earned) so compounding isn't an issue. It seems like with a traditional IRA my earnings are taxed at my income tax rate.


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You don't get it. The money you put into your IRA is PRE-TAX dollars.