Beginner investor... looking for input from the Huge clan

[casinoboy3]

Well after reading these posts I have no choice but to open a Roth IRA. Thanks for all the help and suggestions. I'd be saving so much money on taxes by putting the money into a Roth account now, as I would imagine I'll be in a much much higher tax bracket come a few years. And the comment about "lucky stock picks" - I couldn't agree with you more. Sure everyone would like to double/triple their money, but it's just too risky for me. I hope that by following Mr. Market's lead I'll at least beat the market.

[tscanlon]

Re: Roth IRA

Hey Casino,

One more thing about Roth. I believe if you need cash u can pull out your contributions at any time WITHOUT penalty. For exp. you place $3,000 in your IRA and you earn $1,000 trading Mr. Market stocks. You now have $4,000. You can pull out $3,000 with no penalty or Tax, since Roth IRAs are post-tax income. However, if you pulled out all $4,000 next year, then you would have to pay a 10% penalty on the earnings, which is still less than the 15% that you would pay to the govt if you were not trading in a Roth. Can anyone confirm this correct? I just recently read about this myself.

The 10% penalty is in addition to the income tax at your marginal rate for ordinary income (even if you had long term gains in the Roth (the transaction for a LT gain was "in" the Roth so not taxable the distribution is a separate taxable transaction). There are certain circumstances that are exceptions but require holding for 5 years first (actually if you open it in 2003 you "get credit" for the full year), the only likely one for casino would be the first time homebuyer.