After some amount of research I have decided to open a Roth IRA account. I like the flexibility of withdrawing the principle without any tax implications. This gives me a chance to grow my dividends (without losing a big chunk to IRS). As a big fan of vanguard, it made sense that I open my Roth IRA @ Vanguard. I will be investing in Vanguard Wellington Fund Investor Shares (VWELX)
It offers exposure to stocks (about two-thirds of the portfolio) and bonds (one-third). Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors.
Great Choice. Roth is a good way of growing your portfolio tax free, and also withdrawing the money later on without paying a tax. Also, like you said - in certain cases you can withdraw your initial investment without penalty.
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