IRA management/trading question

[kadams767]

I know that the benefit of investing in an IRA is that the earnings grow tax-free or tax-deferred.  Is it correct, then, that if I actively manage an IRA, say, with Vanguard, that I am free to make as many or as few trades within that account as I would like, without being subject to taxable gains (until withdrawal, in the case of a traditional IRA)?  Like, in theory, someone could be doing the equivalent of day-trading within the confines of their IRA account?

[SJ]

Yes.

And it is an highly effective strategy to be active and take gains in an IRA for this very reason.

[kadams767]

Feb 20, 2014 14:09:18 GMT -5 SJ said:

Yes.

And it is an highly effective strategy to be active and take gains in an IRA for this very reason.

By "take gains", you mean selling at particular high points and reinvesting elsewhere or adding to cash (in the IRA)?

[cjeanette]

Feb 20, 2014 14:12:37 GMT -5 kadams767 said:

Feb 20, 2014 14:09:18 GMT -5 SJ said:

Yes.

And it is an highly effective strategy to be active and take gains in an IRA for this very reason.

By "take gains", you mean selling at particular high points and reinvesting elsewhere or adding to cash (in the IRA)?

Exactly.  It's a huge benefit to be able to trade or even reinvest dividends without having to deal with taxes.

[kadams767]

Thanks. I assumed this was all correct, but I just wanted to make sure that I wasn't crazy for thinking of doing this.

[SJ]

Feb 20, 2014 14:12:37 GMT -5 kadams767 said:

Feb 20, 2014 14:09:18 GMT -5 SJ said:

Yes.

And it is an highly effective strategy to be active and take gains in an IRA for this very reason.

By "take gains", you mean selling at particular high points and reinvesting elsewhere or adding to cash (in the IRA)?

yes

[barefootcontessa]

the IRS also allows you to do covered calls in an IRA, another great way to generate income for retirement.

[kadams767]

I just wanted to bump this to add my positive update.

Following this thread, I have been actively managing a portion of my mom's IRA account. If anyone recalls, my mom has some serious financial concerns and this IRA is really her only source of income/retirement other than SS. She is petrified of "the stock market" and has entrusted me to handle this account for her. She is too young to let it sit in cash, but cannot afford to take big risks either, because she can't really afford a downturn.

So, since this post, I've been able to trade and add almost $2,000 to her account. Which is a big deal in terms of the amount she has. Thanks for the help, MM!

[WinterWine]

This is excellent!! Your Mom is very lucky to have you helping her out with this :-)