Can you buy and sell within a Roth IRA?

Question

What are the tax implications? Or is it buy and hold until you retire like a 401K?

Answer 1

You can buy and sell your shares at anytime in a Roth IRA. However, the rules to selling or withdrawing money is defined by the IRS. Any early withdrawals before age 59 1/2 is subjected to a 10% penalty. There are some exceptions to that rule such as purchasing your first home or paying for higher education. These rules are implemented to make sure that you are building wealth for retirement, that's why its called an Individual Retirement Account.

After age 59 1/2, all withdrawals are tax-free and there is no minimum distribution requirement as in Traditional IRAs.

Answer 2

You can buy and sell within an IRA and within a 401k, actually. You can hold any mutual fund or stock that the company offers, and you can buy and sell and trade them as much as you want within the account--with no penalties or taxes.

Both are designed to be held until retirement age--you shouldn't withdraw the money, but it's fine to trade if you need/want to.

Answer 3

Absolutely. You can buy/sell/hold anything (except maybe options) in a Roth. All gains are tax free, unfortunately, that means no losses are deductible.

401k's also allow transferring between investments, IF permitted by the plan. This is usually a employer or broker restriction.

Answer 4

there are no tax implications unless you make a withdrawal before age 59 1/2

Answer 5

You can buy and sell all you want.