Re: tax implications
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DC - thanks for the info. question though...why do ppl recommend Vanguard/Fidelity index funds for Roths if you want your tax-inefficient investments protected in these. I'm dumb so feel free to use basic terminology.
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Since Roths are tax deferred, they are a vehicle for long term investments, and you want your highest return investments in them. For most people, the highest long term return investments they can choose are index funds. Even without the tax advantages index funds beat 90% of active funds over long periods, basically because of the lower costs.
As you get closer to retirement and you want to put some of your portfolio into less volatile investments (bonds, money market accounts), it might make sense to keep those in the Roth since they are less tax efficient, and keep your money outside of the roth in index funds.
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