Thank you for your input. I have another question. You suggested I start looking into a roth since im a lower income so I started looking into it. Ive managed to figure out most of what I need to know. Where Im confused is how to use the account.
How I understand the best way to use the account is I set up an automatic payment to the Roth account from my paycheck that ends up in the "cash fund", where the money will sit till I pick a place (stock) to put it in.It will only let me add to the account till I hit the cash cap limit. To limit the amount of fees I pay I should wait till I have a decent amount saved up to buy the stocks, say $1000 or wait till i have $1500 to scale in. Then continue to do this every $1000-$1500 till I retire.
Where my confusion is that once the money goes into the account any growth inside is tax free. Well what happens if you end up with a crappy stock that has losses for 5 years in a row or zero gains and you have to sell. That money will now go back to the "cash fund" but will still be in the roth account, does this sell if there was any gains or anything of that sort have to have taxes paid on it since I will be below retirement age, and will it be part of my yearly money cap for what im allowed to put into the account.
I read that im allowed to pull out my contributions at anytime without tax or penalties, but Im wondering what is considered pulling out? I would think that would only be money pulled out of the actual account and into a bank and not the cash that could possibly be bouncing around in Roth account. Im not wanting to do that since im aiming for long term but i want a solid grasp of what im doing and what could possibly happen while im planning my attack.
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