I've come up with a new question for the smartest people on the net!
I have been investing for a while now in a regular brokerage account at Fidelity. All mutual funds, just a place to stash money. Now my tax accountant says I can contribute up to $5500 into a Traditional IRA and save about $1200 on my tax due this year. That sounds like a good benefit. Now I've already read everything on the Fidelity site about the different IRAs and as many search topics I could handle here on this forum. Deducting from my tax due is the only part I can see the benefit of the tIRA. It looks like I can buy any mutual funds under my new tIRA as I could under my regular account, like the Spartan 500 index fund. What is the real advantage of the tIRA besides the tax deduction? It looks like my $5500 will be locked up tight, whereas with the regular account I can sell the fund shares and have the money in a few days. (and yes, I've read the sticky on how to withdraw tIRA funds penalty free... very interesting). Why couldn't I just invest only in my regular account and keep it there until age 59.5? Wouldn't it grow the same? Or if I retire at age 39.5, I'd have easy access to my money.
As for the tIRA fund to invest in... just go for the regular Spartan 500 index fund or one of their target date retirement funds?