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Thread: Roth IRA (Confused Investor)

  1. #37

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    Since I'm first beginning to learn about all of this, what is the average redemption fee?

    Correct me if I am wrong, but is the redemption fee the fee you pay when you begin distributions?

    Since this would be the Roth IRA, does that mean I would pay a fee of 1.5% on every distribution I would make, or is that a one time only fee at a particular point in time?

    Thank you!:^
    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

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  3. #38

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    Nonono. OK.

    An IRA is notan investment. It is not something you purchase. It is nothing tangible. It is merely a set of tax rules. It stands for "Individual Retirement Arrangement", (not account).

    Think of it as a container. You can put anything in that container (funds, stocks, bonds, CD's, etc.) and the only difference is that taxes are handled differently than regular taxable containers.

    So investments are independant andhave nothing to do with IRA's. Treat them separately.


    [line]


    A Redemption Fee is what you pay when you sell shares of a fund before holding it for a reasonable amount of time. This is to prevent actively trading in and out of the fund. It is a fund-thing, not an IRA-thing; keep them separate.

    From HSGFX Prospectus:


    REDEMPTION FEE
    A redemption fee of 1.5% of the dollar value of the shares redeemed, payable to the Fund, is imposed on any redemption or exchange of shares within six months of the date of purchase. No redemption fee will be imposed on the redemption of shares representing reinvested dividends or capital gains distributions, or on amounts representing capital appreciation of shares. In determining whether a redemption fee is applicable to a particular redemption, it is assumed that the redemption is first of shares acquired pursuant to the reinvestment of dividends and capital gains distributions, and next of other shares held by the shareholder for the longest period of time.
    This is not unreasonable. Just be sure to look for it before trading funds, otherwise you may get hit with a fee by surprise. (Yes, that happened to me...once.)



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  5. #39

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    Thanx Rolo. I dounderstand that the RothIRAis basically a tax shelter, and not to be confused with an investment. My bad.

    But what about when the IRA is "invested" into a mutual fund, such as the Hussman we've been discussing?

    Is that when it becomes an Individual Retirement Arrangement, as was mentioned?

    Thanx for helping me to understand.

    God Bless


    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

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  7. #40

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    An "IRA" is not a tangible thing, so it does not "become" anything. It is always an arrangement, not an account. An accurate semantic would be IRA account, which is the same as a regular taxable investment account except that you agree to follow the IRS rules with your "IRAa".

    It does not matter what is in your IRA account. You could put baseball cards in it. For many reasons, that would not be wise, but you could do it. Any investment can be treated with IRA rules, because it is merely an arrangement on taxes, and nothing else.

    The only time you will notice a difference between a regular account and an IRA account is when you file your tax return.

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  9. #41

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    This is worse than theology, and I'm pretty good at theology!:P

    I think I got it now.

    :^




    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

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  11. #42

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    Oh, I agree, the tax code has had my head spinning much faster thanPaul of Tarsusever has!

    Like theology, stick with it and pick it apart, and it becomes clear as you go.

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