I have a question

[Dixiechick]

This shows how little I know...

I'm having to split my IRAs this year half (1/2 to Roth and 1/2 to traditional IRA). This is the first time I'm having to do traditional IRA. My question: If I put the money for my traditional IRA into a tax exempt bond fund, would the interest be tax exempt at time of withdrawal? Just curious, I just thought of this tonight...

Thanks!
Dixie

[sweeps]

No. You will still be taxed at withdrawal time.

You should never buy a tax-exempt bond fund for an IRA, Roth or Traditional.

[disneysteve]

True. It makes no sense and serves no purpose to have a tax-free investment within a tax-sheltered account. That includes 401Ks since all withdrawals are taxed, regardless of what generated the money originally. So you'd end up paying tax on that "tax-free" investment.

[jIM_Ohio]

no tax free bond fund in an IRA or 401k, I agree with other two.

[Dixiechick]

Thanks everyone! I appreciate the replies!

Dixie