Is it wise to have an investment account and pay the taxes? and City Year Boston Investment Community Breakfast 2012

Is it wise to have an investment account and pay the taxes?

I am currently maxing out my ROTH IRA per year. I am also contributing to an individual investment account investing in more mutual funds.

Is this a wise decision? What are the tax implications on my investment account. I know that my ROTH is tax-free but am not sure on what are some of the tax rules for the investment account.

Thanks in advance.


Investment best answer:

Answer by sleddog382000
The advantage of a taxable personal investment account is that you don't have to pay taxes in the future when you withdraw your money, since they have already been paid and the money is yours.

If you wish to invest in tax-deferred or tax-free accounts, you need to do more research in what sorts of investment vehicles are available besides Roth IRA's. Insurance companies offer variable annunity accounts which are tax-deferred. There are also other legal ways of investing which avoid present taxation, such as Health Savings Accounts.

You might also consider starting a private business and enrolling in a company Keogh Plan, which allows you to put away larger amounts than an IRA.

There's many a way to skin a cat.

Investment

City Year Boston Investment Community Breakfast 2012


Image by cityyear
Sandra Lopez Burke
Vice President and Executive Director - City Year Boston
Mandarin Hotel - Boston, MA
Photo: Jennifer Cogswell
December 7, 2012

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