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Posted On: 02/28/2020 10:19:12 PM
Post# of 148903
Re: Newbieinvest0r #19755
Newbieinvest0r, you posted:
Call me crazy, but I cashed out one of my retirement accounts and added more shares today! I have 56000 shares and I’m here for the long haul! I believe, nervous ,but also excited I added more! Enjoy reading the informative posts, thank you!
If you actually withdrew $ from a retirement plan to buy stock in a non-retirement plan, then I would tell you, without knowing all the details, that you potentially made a big mistake!
Talk to a tax advisor to get the details, but, depending upon one's age, withdrawing funds from a retirement plan can set one up to pay significant taxes next year on the amount withdrawn, and that can be a big negative when tax time rolls around next year, setting one up to owe additional federal as well as state income taxes, if one lives in a state that levies income taxes. Alternatively, why not just buy the shares within the retirement plan, or if the option to buy shares within that plan doesn't exist, then set up a separate IRA into which you can transfer funds from the existing plan and then buy the stock there? Then you can allow the shares to increase in value over your lifetime and only pay taxes on withdrawals when you can maybe better afford, or want to!
There are many more nuances to consider, and I post this as just a heads up to folks to not get carried away dreaming of riches beyond their wildest dreams, leading one to make some poor choices before gathering all information that may impact one's future in a negative way!
Call me crazy, but I cashed out one of my retirement accounts and added more shares today! I have 56000 shares and I’m here for the long haul! I believe, nervous ,but also excited I added more! Enjoy reading the informative posts, thank you!
If you actually withdrew $ from a retirement plan to buy stock in a non-retirement plan, then I would tell you, without knowing all the details, that you potentially made a big mistake!
Talk to a tax advisor to get the details, but, depending upon one's age, withdrawing funds from a retirement plan can set one up to pay significant taxes next year on the amount withdrawn, and that can be a big negative when tax time rolls around next year, setting one up to owe additional federal as well as state income taxes, if one lives in a state that levies income taxes. Alternatively, why not just buy the shares within the retirement plan, or if the option to buy shares within that plan doesn't exist, then set up a separate IRA into which you can transfer funds from the existing plan and then buy the stock there? Then you can allow the shares to increase in value over your lifetime and only pay taxes on withdrawals when you can maybe better afford, or want to!
There are many more nuances to consider, and I post this as just a heads up to folks to not get carried away dreaming of riches beyond their wildest dreams, leading one to make some poor choices before gathering all information that may impact one's future in a negative way!
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