I Hate Rules

     Some rules are necessary in civilized society. You shouldn't steal, you shouldn't kill anyone (in most cases), and you should pay your taxes. However, when it comes to my nest egg, I believe that the fewer rules that I have to follow, the better. Most people have a qualified retirement account of some kind, like an IRA, 401k, 403b and so on, but in my last post I stressed the importance of saving for the future with after-tax money too. Those qualified retirement accounts are constrained by reams of rules about how much you can contribute, when and how much you can withdraw, what you can invest in, and on and on. In exchange for following all the rules, you get to allow your money to accumulate tax deferred until age 59.5, at which time the rules tell you how much you have to pay tax on. At age 70.5 the rules tell you how much you have to withdraw every year as a required minimum distribution (RMD) and pay taxes on.  I don't have a problem following these rules because if there is one thing I hate more than rules, its paying taxes. In my opinion, any time I can defer or eliminate paying taxes, its a good thing.Why am I bringing this up? Well I recently read an article in the local paper by a well known financial guru who thinks any after tax savings should be put in a Roth IRA. I beg to differ. First off, full disclosure: I own a Roth IRA. It's relatively small and accumulates tax free. It also will not be taxed when I decide to withdraw the money. A Roth is a good idea for someone who follows the rules. There is a 5 year rule, order rules for distributions, rollover rules, contribution rules, and even more rules. The older I get, the fewer rules I want to follow. Hell, I might even forget some rules. I could order publication 590a from the IRS to remind me about all the rules for the Roth IRA. It would make great reading before I fall asleep. I could even order publication 590b if I am still awake and need more reading material. Maybe it's just me but I just want to follow enough rules to keep my ass out of jail. That is why I like to have some investments that are not restricted by IRS rules. With my stock portfolio, I buy what I want, when I want, sell what I want when I want and settle with the government at the end of the year. I try to offset my gains with losses to mitigate my tax liability. The dividends are taxed at preferable rates (if qualified dividends).  What really scares me about the rules for the Roth IRA is that the brainiacs in Washington D.C. could change the rules at some point during my lifetime. Then I would have to order more IRS publications to help me fall asleep.