what is the difference between an IRA and a mutual fund ???

Question

I know they are similar, but im not sure of the difference?

Answer 1

An IRA is a type of account that may have mutual funds in it. Think of a mutual fund as a type of investment. Instead of buying an individual stock or bond, you buy a mutual fund which has many stocks and bonds in them. They are usually professionally managed, and they charge a fee for the management of the fund. Vanguard is very big into what they call passive funds, which track a certain index, such as the Dow or the S&P. Since it is not actively managed, the fees are much lower. I personally think this is the way to go.

An IRA on the other hand is a trype of account that holds your investments. When you open an IRA, you do not have to pay capital gains until retirement (specifics exist for age, etc.) It is an account that the federal governement sanctions that is supposed to promote savings for retirement. Call someone like Fidelity, Vanguard or Schwab if you want to open up one or even to learn more information on them.

Answer 2

An IRA is an Individual Retirement Account and you are limited to how much you can contribute each year. There are better tax breaks for establishing an IRA than opening a mutual fund. An IRA can be many different things such as a basic savings account, a CD, or even a mutual fund. If you already have some sort of retirement plan it may be a good idea to set up an IRA just for tax reasons and put the majority of your investment into a mutual fund for performance reasons.

Answer 3

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Answer 4

An IRA is a brokerage account Into which you can deposit $4000 a year as a single. The money comes off your taxable base and the money is invested as you see fit. The growth is not taxable nor are the dividends and interest. However, you pay tax when you retire on the amount you withdraw each year. In a ROTH IRA, the money you deposit is after tax but you withdraw the money tax free after you retire; you can contribute to a ROTH until your annual income exceeds $90,000. A mutual fund is a pool of managed money that is presented as a single investment. The fund may invest the money in stock, bods or a mix. There are also funds that invest in real estate. Instead of a stock price the price at net asset value which is a weighted average of the integral investments at the close of business each day. All funds have management fees and some require a load (% of investment as a payment) on investing or, sometimes, when they are sold (back load). Back loads usually reduce over time so you might pay 5% year one decreaseing a percent over 5 yeaars so that after 5 years the load goes away,

Answer 5

An IRA is a type of retirement account. A mutual fund is a type of investment. IRA stands for Individual Retirment Account. It is possible to have a mutual fund in your IRA account (which may confuse some people about their similarities) but they are not the same thing by any means.

Answer 6

An IRA is an account type and a mutual fund is an investment. In the easiest terms think of an IRA as a garage and the mutual fund as a car in that garage. You can change cars as much as you want but the garage is attached to the house. The car can be red, blue, green, long, short, a truck and your investments could be CDs, bonds, stocks, Mutual Funds etc...

Answer 7

An IRA is a tax code created status and stands for "individual retirement account." It can contain nearly any type of asset held by a financial institution, except commodities, such as a cd, mutual fund, individual stocks and bonds, unit investment trusts, closed end funds and options.

A mutual fund is an "open end investment company," or in simpler terms a pool of investors who share a common goal where the pool is managed by a registered investment adviser, the assets are held by a trustee and governed by a board of directors.

Mutual funds can be in an IRA.

Answer 8

A mutual fund is a form of collective investment that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities. The fund manager trades the fund's underlying securities and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. You have quick access.

Traditional IRA - contributions are often tax-deductible (often simplified as "money is deposited before tax" or "contributions are made with pre-tax assets"), all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted). You have penalties if you access.

Answer 9

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Answer 10

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