Sell mutual fund to fund 2017 Roth IRA?

[lampstache]

My wife purchase a mutual fund about 6 years for $3,000. Since then it has doubled and is right around $6,000 today.

My question is should we sell this mutual fund, pay taxes on the gains next tax season, and then use the money to fund her 2017 Roth IRA while we still can? Leftover money would go towards a 2018 Roth. We are aiming for early retirement in our early to mid 50's if this makes a difference.

I'm sure the answer depends so let me know what other information would be helpful to have in making this decision. Thanks!

[Catbert]

I'd probably do it.

If the 3K capital gains would fix in the 15% bracket it would be tax free.  Even if you had to pay capital gains of 20% that's only $600.  From then on gains will be fee in the Roth.  Depending on the fund, that could be another reason all by itself to sell.  If it's anything but a low-fee mutual fund then its costing you every.single.year that she's in it.

[MDM]

Depending on http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits, there is also the choice of Traditional versus Roth.

For most looking to retire early, traditional will be better.  It depends on marginal rates now vs. when withdrawing.

[cchrissyy]

yes I'd do that

depending on your taxable income, there will be little or NO tax on long term capital gains

[lampstache]

Thanks all. We went ahead and sold/moved the funds from her mutual fund to max her 2017 Roth IRA and with leftover funds started contributing towards 2018. I appreciate the feedback.