Brokerage or IRA

[clumlee]

Hi Folks,

I'm trying to get to FI. I have a spreadsheet showing me what I have, how much my dividend payments will be, and a calculation of how many shares of what I'll need to have to make $X a month in dividends (I have some monthly payers). I know conventional wisdom is to max out my Roth IRA before tackling my brokerage account. But my question is this: How many of you go for the IRA before your trading/brokerage account, and vice-versa?

Thank you!

CLL

[mandy_2002]

I maxed out the IRA (traditional or Roth depending on the year) first every time.

[Lives to travel]

I think a key question is how young you will be when you decide to retire.  If you need income that you can't touch without age related withdrawal penalties, be careful not to load your Roth with securities that you may need in your regular brokerage account.  (I'm assuming that you can't withdraw cash dividends from your Roth before 59 1/2 - correct me if I'm wrong...)

[mandy_2002]

I think a key question is how young you will be when you decide to retire.  If you need income that you can't touch without age related withdrawal penalties, be careful not to load your Roth with securities that you may need in your regular brokerage account.  (I'm assuming that you can't withdraw cash dividends from your Roth before 59 1/2 - correct me if I'm wrong...)

The dividends can be reinvested when earned. You can withdrawal your invested money (principle) from a Roth IRA at any age. Because of the reinvestment of dividends, you will be pulling from a different amount in the same pot until you reach the apt you invested, then you would have to leave it until you turn 59.5 or start SEPP's. You can also stay a ROTH conversion ladder from a 401k / Trad IRA which will increase that basis.

I'm assuming that OP has more than the max contribution for an IRA, otherwise ER would be a difficult proposition.

Also remember that dividends chasing is not always the most stable thing. I remember 2009 when so many rock solid legacy dividends were slashed or completely stopped. (There have beenserver several recent posts about this.)