Can’t wait to see what my SpirtAerosystems stock does when Boeing buys them back.
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it's the tax benefits of the Roth.

any gains you make will be tax free..


you can only fun a roth 6500-7500;a year, because it's such a crazy powerful advantage. your 1st 6500 - 7500 every year of savings should be a roth ira (or 401k)
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Sure, but I’d want to confirm if he has a retirement account. 401k, pension, etc… Does he have access to a workplace retirement? Are they forgoing a workplace match to save the $3,000.
Does he have an emergency fund? Is the money saved for anything upcoming?
In my experience novel investors need an in depth conversation before general advice.
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My only point was the need to ask more questions and not jump into an IRA. I work in finance, have a BS in Finance, previously was a trader with series 7 and 63. I read the posts here a lot, I just don’t comment much.
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Hey, request for free advice here.

Does a Roth conversion count as income in MAGI for the purposes of assigning Medicare costs? In other words, could a big Roth conversion throw one's income up enough to incur the extra Medicare income-based surcharges?

I think it does, but I can't find a definitive answer on the world wide web.
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Well sure. But he threw it on a football message board.

But let’s walk through it.

He said he had nothing invested. That rules out a 401K. Doesn’t necessarily rule out a pension but if all he has is a pension he still needs a Roth.

He wouldn’t forego a workplace match. He said he HAS 3000 (not could forego contributions to a qualified plan to get 3000). And the contributions to an IRA wouldn’t count against his contributions to a qualified plan, which from what he said he doesn’t have anyway.

An emergency fund shouldn’t be “invested”.

If the money is saved for something upcoming it shouldn’t be “invested”.

He didn’t ask for a financial plan, he asked what we would do for a first investment so I told him.

Sorry if you’re offended. If he wanted an in-depth discussion we’ve been through it all. In 4 lines he asked what investment we’d put the first dollar in.
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That reminds me, say you had some money tied up in stocks and ETFs in a brokerage account. Realistically, how long would it take for you to sell those holdings and have the money moved to your primary bank account?
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Depends on the brokerage. Most have it spelled out in the FAQ, but most are a day to close 2 days to transfer unless you pay for a wire.

Best to read the website of your broker.
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I've never closed an account completely, but when I've moved money to a brokerage from my bank, it's typically taken two days to complete.
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2-3 days depending on if your cash is settling from recent trades.
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Ok, cool, I figured. So the whole “don’t invest money you’re saving for something” in regards to a brokerage account is advised more so because it’s risky and a portion of the investment could be lost?
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Yeah, completely. It's about not losing your BMW money because the market happened to dip 15 percent while you were test-driving.
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Yes, it does so be careful. It’s called IRMAA
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Dang it. I'm walking a tightrope trying to do Roth conversions without tilting into the next higher tax bracket, and now there's another tax hellhound nipping at my heels.
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Correct. I personally think of stocks and bonds through a broker as being liquid with some caveats. There are rarely situations where you'd need to be pulling out 10s of thousands of dollars on the spot, so you could sell what you have and transfer it when you need it. That said:

1. This doesn't apply to retirement accounts - just taxable brokerage accounts. Unless you want to deal with pretty large penalties, those are a one-way street until you are truly nearing retirement.
2. There's no guarantee that you'd get the price you want at the time you are forced to sell. And often times emergencies come up when the stock market sucks, like getting laid off or having your home value tank when you need expensive repairs.
3. Short-term capital gains taxes are pretty high, so it's not a good strategy to invest everything you have with a plan of pulling it out in a few months. Ideally, you shouldn't be selling anything that's been invested less than a year.
4. This all assumes that we're talking about publicly-traded stocks. I have a situation where I can buy stock in my own company, but we're still privately held. If I wanted to sell those stocks, I'd have to find a buyer, which would definitely not be a 2-3-day process.

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