Wednesday, March 28, 2007

Should you be using StockDoubling Stocks in your IRA?

Before we get to today's article I wanted to let you know I may get sometime this week to do some of the research for the next stock pick. I am not sure yet if it will be enough or not but we will see how it goes. I wanted to let you know in case I do get enough time and the stocks I am currently look at come out with decent earnings etc... We COULD have our 5th pick as early as next week.
Stay Tuned

Should you be using StockDoubling Stocks in your IRA?

IRA stands for Individual Retirement Account.

You can set one up thru most stockbrokers. The broker I use is they offer great commission rates of just $7 per trade. And you can open an account for as little as $500.

You can open an IRA with them or any broker you so desire.

The two IRA's to choose from would be a Traditional IRA and a Roth IRA.

I won't go into all the details of each of them as they do vary a little bit you can read up more on them at your stockbrokers website.

A traditional IRA you can deposit money pretax into the IRA. When you become eligible (it will vary) but generally at 59.5 years of age you can began to withdrawal your funds should you so desire. It will be taxed at that time of withdrawal. If you withdrawal before 59.5 you will pay penalties + taxes owed etc..

A Roth IRA you deposit after tax money into the IRA. Again you become eligible at 59.5 years of age however you can withdraw the money TAX FREE.

So if you had $1,000,000 in a traditional IRA you would be paying taxes when you withdraw at 59.5 years of age. However you were depositing pretax money.

If you had $1,000,000 in a Roth IRA and reached 59.5 years of age you could withdrawal TAX FREE.

I choose the Roth IRA for myself.

So I have a regular stock trading account that I use for the StockDoubling project. And a I have Roth IRA. In the Roth I also purchase the stock for the project though not usually as many shares. I also put some money into other stocks I like etc..

If all goes well with the StockDoubling project I will be paying taxes each year on my regular stock trading account as it grows. But with the Roth IRA I won't be paying taxes on the gains at all assuming I leave it in there until I am 59.5 years of age.

So is an IRA right for you for the StockDoubling project? I can't answer that only you can.
But if you have an IRA already setup you may want to take $500 (or whatever amount you are comfortable with) and put some $$$ on the StockDoubling pick as well. That way the money can grow tax free towards your retirement.

I have a regular stock trading account as well so if things come up and I have to withdrawal monies I could do that without penalty.

You can even get a break on your taxes for 2007 by opening an IRA before April 17th. (Ask your tax advisor for details.)

If you are looking to build money up for retirement that is a good way to go with an IRA. Only you can decide if it is right for you. But having a long term plan for retirement and an account where you can withdrawal money out anytime you want works for me.

Happy Trading
Steve Hoven

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