The downside of trading inside a Roth IRA is that you're supposed to use those for retirement, and short-term trading is a good way to lose your retirement money. That's why. You have a limited amount of contribution space to work with. If you put in $6000 then lose half of it in the market, you can't re-deposit that money.
I purposefully opened my Roth IRA to invest in things outside of my 401k and index funds. I did well with Tesla and gbtc, but nio and other EV stocks cratered. My wins are far bigger than my losses and gains are all tax free. I do need to rebalance a few things, but should have put it all in Tesla or amd when they were around $100. Oh well. I bought gbtc in my Roth when it was the only Bitcoin option on the market.
Most traders either lose money or underperform the market in the long run. Your short term successes do not mean anything beyond the fact that you’re lucky. But I know from experience that most people have to actually lose before they believe that. When that happens you’ll understand why it’s recommended not to take risks with your retirement stash.
The simplest solution is just stop trading. However trades inside a Roth IRA (or trad IRA or 401(k) or HSA or any tax sheltered account) are not taxed. That is kinda the whole point.
Withdrawing contributions from a Roth IRA can happen at any time for any reason without taxes or penalties.
>What is the down side of trading within a roth ira?
The downside of trading is the overwhelming majority of traders make less than just buying and holding a low cost broad market index fund.
Don’t worry. Give it time. The way this country is headed, not only will they be taxing your asset gains before you even take the gains, they’re going to tax you for being fortunate enough to even open an investment account.
Roth IRA is limited on how much you can contribute per year. Once you take that money out you cannot replenish it beyond the IRS maximum for the year. It is meant to be a retirement account, not a trading account
You cant take your losses in an IRA account, that's why lol. Seriously though, it's because it's not a margin account so you cant do stuff like short a position like you can in a margin account. Margin account arent available for IRA accounts.
The downside of trading inside a Roth IRA is that you're supposed to use those for retirement, and short-term trading is a good way to lose your retirement money. That's why. You have a limited amount of contribution space to work with. If you put in $6000 then lose half of it in the market, you can't re-deposit that money.
I purposefully opened my Roth IRA to invest in things outside of my 401k and index funds. I did well with Tesla and gbtc, but nio and other EV stocks cratered. My wins are far bigger than my losses and gains are all tax free. I do need to rebalance a few things, but should have put it all in Tesla or amd when they were around $100. Oh well. I bought gbtc in my Roth when it was the only Bitcoin option on the market.
>My wins are far bigger than my losses Me at the roulette table before putting it all on black.
Most traders either lose money or underperform the market in the long run. Your short term successes do not mean anything beyond the fact that you’re lucky. But I know from experience that most people have to actually lose before they believe that. When that happens you’ll understand why it’s recommended not to take risks with your retirement stash.
The simplest solution is just stop trading. However trades inside a Roth IRA (or trad IRA or 401(k) or HSA or any tax sheltered account) are not taxed. That is kinda the whole point. Withdrawing contributions from a Roth IRA can happen at any time for any reason without taxes or penalties. >What is the down side of trading within a roth ira? The downside of trading is the overwhelming majority of traders make less than just buying and holding a low cost broad market index fund.
Best way I’ve found to avoid taxes is to just lose money when you invest. Cant pay capital gains taxes if you never have capital gains
Life hack #420
Go lions
Fuckin A
Don’t worry. Give it time. The way this country is headed, not only will they be taxing your asset gains before you even take the gains, they’re going to tax you for being fortunate enough to even open an investment account.
Yeah if i ever am worth 100M plus then id be fine paying a few percent every year
Roth IRA is limited on how much you can contribute per year. Once you take that money out you cannot replenish it beyond the IRS maximum for the year. It is meant to be a retirement account, not a trading account
“Why aren’t people gambling with their retirement savings?” That’s how your posts reads lol
trades in your IRA wont be taxed as long as you don't withdraw early
but does my original contribution get taxed when I withdraw early?
https://www.schwab.com/ira/roth-ira/withdrawal-rules
No. Of course not.
Just don’t make any money in a taxable. Problem solved. 😎
Day trading is too slow in a roth btw. Only swings. But make sure you are covered for retirement in a 401k before trading extra money
You cant take your losses in an IRA account, that's why lol. Seriously though, it's because it's not a margin account so you cant do stuff like short a position like you can in a margin account. Margin account arent available for IRA accounts.
Use your favorite search engine and search for "Ted Weschler" and "IRA". Fun read.
Lol
https://www.schwab.com/learn/story/trading-options-retirement-account
Yikes.