Roth IRA and DRIP's

[jpr62902]

I gots me a question for all you investment wizards on FF.

Let's say I buy $5,000 of XYZ Co. stock that pays a 5% dividend ($250). I set that up as a DRIP and stick it in a Roth IRA. Does the dividend reinvestment count against my annual contribution limit?

 

[OmegaRunner]

No. Dividends and other earnings do not count as contributions.

 

[REDDOGTWO]

No. Dividends and other earnings do not count as contributions.

I concur.

 

[maraba]

Does the dividend reinvestment count against my annual contribution limit?

No. Contribution is the money you put into Roth IRA. The return on your investment can not be considered as contribution.