Sep
3
What are the different reasons to open a general investing and/or a retirement investing account?
Filed Under investing
Ty C asked:
On Vanguard it has a “General Investing” account and a “Retirement Investment” account. Obviously the latter is for IRAs, but what is the advantages and purpose of the general investing?
Jay
On Vanguard it has a “General Investing” account and a “Retirement Investment” account. Obviously the latter is for IRAs, but what is the advantages and purpose of the general investing?
Jay
Comments
2 Responses to “What are the different reasons to open a general investing and/or a retirement investing account?”
The main reasons are tax considerations.
In a retirement account, depending on how you set up the account, either the contributions can be tax deductible (traditional IRA) or the withdrawals are tax free (Roth IRA).
In a general investment account, depending on how long you hold on to the account, the earnings are either taxed as ordinary income (short-term) or taxed at the lower capital gains tax rate (long-term).
Investing designates that its nonretirement nontax protected the advantages beyond saving money in the advantages.
An ira you have money eleigible to maximize your risk.