How to Invest After Maxing Out Roth IRA?

[Anonymous No.2458882]

Assuming I max out my Roth (no 401k company match to consider either), can I start an investment account with vanguard?

I would likely continue the same strategy of buying and holding ETFs, but how would the tax implications be different from my Roth account?

[Anonymous No.2458921]

>>2458882
Buy ETH

[Anonymous No.2459099]

backdoor more into the Roth IRA if you're not looking for excitement.

[Anonymous No.2459368]

>>2459099
> dubs checked

how do I backdoor in? I'm not familiar with the concept sorry

[Anonymous No.2460308]

>>2458882
Taxable account: you have to pay taxes on capital gains and dividends, but you can do whatever you want with the money.

The tax rate on qualified dividends is less than the normal income tax rate. Likewise, for investments held at least 1 year, the capital gains tax rate is less than the normal income tax rate.

By the way, if you are in the 10% or 15% tax brackets, the long-term capital gains tax rate and the qualified dividend tax rate is 0%. Thus, if you perpetually stay in these tax brackets and always keep your holdings at least a year before selling, your return will be no better in a Roth-IRA than in a taxable account. However, you must deal with the penalty of being a poorfag.

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Roth IRA: you don't have to pay capital gains or dividends taxes provided you don't use the funds until age 59.5. Thus, capital in a Roth-IRA will grow faster than in a taxable account for anyone in the 25% income tax bracket or higher. This is at the cost of not being able to use the money for a long time.

What if you want to use the money in your Roth-IRA anyway?

If you withdraw earnings from a Roth-IRA, you're in a worse situation than if you had just used a taxable account. You can withdraw contributions to a Roth-IRA tax-free, but if you dip into earnings, then this withdrawal is considered normal taxable income and taxed accordingly. Of course, this rate is higher than long-term capital gains tax rate. In addition, you must ALSO pay a 10% penalty on the withdrawal.

There are, however, some exemptions. You get an exemption once in your life for buying a home. There are also exemptions if you become disabled, and for certain educational and medical expenses. Look these up if need be.

In conclusion, money earmarked for retirement is best put in a retirement account. If you think you'll need the funds, go taxable.

[Anonymous No.2460825]

>>2460308
If you want to know the difference in how taxable and tax-advantaged accounts grow, check out my formulae. Plug in your variables and you can now calculate your account balance over time.

Notice how, if you are in the 10% or 15% tax brackets and your qualified dividends and capital gains tax rates are 0%, the taxable account collapses into being the same as the tax-advantaged account.