A good reason not to pay IRA advisory fees from outside the retirement account?

You put money in your IRA, and there are fees for the account from the brokerage house for managing the portfolio. I’ve been told, that it was better to have those fees paid from outside of the retirement accounts (such as your personal checking account), because you can take a tax deduction for the fees. But I believe it is subject to the 2% of gross. But the other reason is that you want as much money to stay in your IRA accounts as you can, and it doesn’t make sense to lessen your investments by having the fees taken from the IRA retirement accounts themselves.

I don’t remember when, but I thought that some managed accounts didn’t permit the IRA fees being paid from outside of the account?

Financial advice is best suited to IMHO.

Colibri
General Questions Moderator

AFAIK any such restriction is not regulatory.

Some IRA vendor someplace might well refuse to let you pay fees with non-IRA funds. The solution to that is easy: don’t use that crappy vendor.

You may want to pay from the IRA for two related reasons: First, you want more money now to play with. If you’re not going to be investing the money, the fact that you could get tax-delayed income is irrelevant. So by paying the taxes from the IRA you can splurge on a <whatever> without taking the penalty to withdraw the funds from the IRA. Second, there is a minimum amount of money that you have to withdraw every year from the IRA after retiring, and the additional amount from paying the fees from outside the account might be currently projected to be taxed at a higher rate than most of the money you would be getting in the distribution. So that money that you’re keeping in the IRA account to get tax-deferred growth really wouldn’t benefit from that deferment all that much.

That’s how I’m answering the question that I thought you were asking from the title of your post. Your post actually seems to be asking a different question that was already answered sufficiently.