If I include some individual stocks and Exchange Traded Funds (ETFs) in my Roth IRA, will I get charged a commission fee every time I take a distribution from them when I retire?
For example, let's say I retire tomorrow. I have my Roth IRA linked to my checking account. I start making withdrawals from my Roth IRA, and have the money electronically deposited into my checking account every 2 weeks for living expenses. Would this trigger a fee of any kind? If it does, I will most definitely not purchase any individual stocks or ETFs. I will only stick to index mutual funds, as these don't charge anything to take regular distributions from.
I know that TD Ameritrade charges $9.99 every time an individual stock or EFT is bought or sold. I can't imagine how it could possibly be worth it to get hit over the head with this fee every 2 weeks just to withdraw your own money.
By the way, the stocks or funds I will buy will be for the long haul. I have no intention of ever selling them. I will only withdraw about 3% annually from them to live off of, but I want to take this withdrawal a little at a time, say, every 2-4 weeks. This way the rest of my principal can remain in the investment to compound away.
To get a better idea of the big picture, this is what I do:
I max out my 401k and 457b every year (34k/yr) in the following:
10% stable value fund
30% Total bond index fund
25% large-cap index fund
9% mid-cap index fund
8% small-cap index fund
18% international index fund
I just opened a Roth IRA, which I will also max out every year (5k). I will be investing in other asset classes here (that my employer does not offer) to round out my portfolio. Here is what I ultimately want to invest in (assuming I don't get charged commission fees for withdrawals):
- REIT index fund (currently have some money in VGSIX)
- Micro-cap fund
- Junk bond ETF (considering JNK or HYG)
- TIPS or short-term bond EFT
- a few individual value and dividend stocks
There you have it.
Remember that I am trying to create a "permanent" portfolio from which I will be withdrawing about 3% a year for life once I retire. I will not be selling any fund or asset in its entirety.