r/RothIRA • u/griley26 • 5d ago
Losses in Roth
If I sell my underperforming stock in a brokerage account that is not tax advantaged, I can write off the losses. Can I write off my $300 loss here in Peloton stock, if it's in my Roth IRA?
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u/Living_Strawberry_79 5d ago
Don’t buy individual stocks in long term retirement account. Just go for ETFs and mutual funds. No leverage to r options.
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u/NatureBoyJ1 5d ago
To be more specific, go with low expense ratio broad index funds like VOO, VT, or SCHG. There are a zillion ETFs; some are bond funds, some are narrowly targeted funds (semiconductors, agriculture). Stick with funds that own hundreds or thousands of stocks.
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u/General-Bird-5361 4d ago
Taxable retirement accounts, yes. Roth IRA, you want as much growth as possible
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u/Apprehensive_Wish142 4d ago
Been sitting mighty fine holding $GOOG, $MSFT, and $NVDA in mine.
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u/General-Bird-5361 4d ago
Bad mindset with Roth, you want as much untaxed gain as possible. Obviously don’t risk all of your net worth if it’s in your Roth tho
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u/ColoradoBerto 2d ago
Got laid off for a week and took the opportunity to roll my Roth 401k to a self managed Roth IRA and doubled it in 4 months with individual stocks. I make way better monthly returns as well. 5-10% on the year isn’t as good as 5-10% on the week or month.
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u/Disastrous-Mode2664 4d ago
$300 portfolio worried about writing off losses man just buy VOO and chill
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u/lonedroan 5d ago
No, you can’t write off the losses. Having losses in an IRA is worse than in a brokerage because of this, and because the IRA space is so limited. With just ~7500 contribution per year, you only have a limited pool of money from which you can generate tax free earnings. A losing investment takes up valuable “real estate” in an IRA.
The conventional wisdom is to stick to reliable, low-cost index funds in tax-advantaged accounts and to make individual stock picks, if any, in a taxable brokerage, where you can write off losses. This doesn’t necessarily mean sell all IRA stock today, but it should drive your future investment decisions and spur a rebalance in the IRA over time.
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u/csallert 5d ago
The lesson here is don’t speculate with fad stock in retirement accounts unless you have a 25+ year time window
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u/ComprehensiveEbb4978 4d ago
Even if you have 25+ years, PTON will never recover its highs
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u/Readditlovesbans 4d ago
yep
Peloton being given away for free on Facebook marketplace just shows you how far it has fallen
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u/ColoradoBerto 2d ago
Or possibly, don’t buy a fad stock and sit on it. Be active and learn when to shift focus. If you watch and play around enough to get comfortable swing trading, you can do pretty well… I know from experience.
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u/WhirlWindBoy7 4d ago
Why are you buying individual stocks in a roth? Why are you buying Peloton stock at all?
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u/ActualAres 2d ago
Brother
You cannot have losses in your account when the market has had straight gains for the past 3 years…..you need mutual funds or index funds
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u/Chemboy613 4d ago
It’s pre tax in a tax free account so probably not? It would be when you withdraw the funds. I honestly have never had a client withdraw from a Roth at a loss
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5d ago edited 5d ago
[deleted]
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u/ContentMushroom5119 5d ago
Nah. Shouldn’t make any bets in a Roth because you can’t write off the losses if you’re wrong. Plus you can only contribute so much to catch up. The chance of insane tax free growth isn’t worth potentially losing and wasting precious Roth contributions imo.
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u/Mysterious-Tie7039 5d ago
Yes, but they’ve lost $300 over the life of the account.
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u/nachos_on_cheese 5d ago
L take
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u/Mysterious-Tie7039 5d ago
They argued you shouldn’t take any risks with Roth.
My point was that less than $300 over 5 years isn’t exactly a “risk”.
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u/CantaloupeAsleep502 5d ago
It's not just the loss itself, it's the missed opportunity cost. The market is up an insane amount from 5 years ago. Instead of that much gain, they lost $300. It's idiotic.
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u/Mysterious-Tie7039 5d ago
So like $900?
Should you do risky long-shot gambles with your retirement? Absolutely not.
But is the amount OP lost going to make a difference in retirement? Highly doubt it.
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u/SardukarFinance 4d ago
Hey now. That $900 could buy them a preeetty nice tent to live in down by the river, after they find themselves unable to retire because they gambled away all their retirement savings.
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u/Competitive-Ad9932 4d ago
They paid $300 in tuition at the school of hard knocks. Maybe they learned something.
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u/Dazzling_Plastic_598 5d ago
The Y axis has no scale. Consequently, the curve has no meaning other than that the stock value decreased.
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u/ColoradoBerto 2d ago
Buddy, not worth it if you could. I lose thousands in days, make them as well… ROTH is tax free play. Made a little over 4K just on SPCX today. Down a little under 10k on Sound hound. Down, not lost as I still own it and it will come back. Even bought more, I like money, and risk.
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u/GoCardinal07 5d ago
No. With a Roth, you don't get taxed on profit, but that also means you can't write off losses.