Dividends4Life: Dividend Stocks For A Tax Free Retirement

Dividend Stocks For A Tax Free Retirement

Posted by D4L | Thursday, October 20, 2011 | | 0 comments »

Probably one of the smartest investment decisions I made several years ago was opening a Roth IRA. Sadly, this wasn't my first Roth IRA I had opened. I previously opened one with a different online broker than I use now. Armed with a valuable learning experience and a focused dividend re-investment (DRIP) strategy, my 2nd go around with a Roth IRA has been (and will be) much more successful.

Some people will argue that a problem with the DRIP strategy in a regular account is paying taxes on income that they don't have since that income was used to buy more shares. A great way to avoid this tax problem is taking advantage of a Roth IRA. When you hold dividend paying stocks in your Roth IRA you NEVER have to pay taxes on those reinvested dividends.

Source: Seeking Alpha

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