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I have a Roth IRA and so far I've contributed to the same fund each time. When I retire would it make any difference which funds or how many different funds I had invested in or would all of the money be consolidated into one account that I would withdraw from?

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When it comes time to withdraw cash, if you don’t have any cash inside your IRA (just investments), you will need to sell some of your investments to get cash to withdraw. If you have multiple investments in your IRA, you will need to decide which investment(s) you want to sell.

In a taxable account, there are strategies specific to saving money on capital gains tax. However, in an IRA, this isn’t a concern. You can base your decision on other things. Some strategies you might choose:

  • If you are happy with the ratio of the different funds in your portfolio, you might sell some of each of your funds to maintain that balance. Conversely, if one of your funds has grown more than the others and has become a higher percentage of your portfolio than you would like, you could sell that one.

  • You might base your decision on what you expect the future performance of the investments would be, selling one you think will be under performing in the future.

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  • At retirement would I need to sell all of the investments to have only cash in order to withdraw the money?
    – Rich
    May 11, 2020 at 12:36
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    No, you only sell a fraction of your investment; just what you need to withdraw. However, as you get closer to retirement, you should probably have a smaller percentage of your portfolio in stocks than you do now, and a larger portion than you do now in things like bonds.
    – Ben Miller
    May 11, 2020 at 12:39
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Matter for what? You don't say what it supposedly matters for, so I'll assume IRS regulations.

For the IRS, it is only relevant how much your total value in all IRA Roth accounts is, and when your first IRA Roth was opened. Otherwise, all the money in all your IRA Roth (in any investments you might have chosen) is just a big soup of money.
Gains are tax free anyway, and you RMDs are calculated by a percentage related to your current age times the total amount. Everything else you do between accounts and investments is of no relevance (for the IRS).

It certainly is relevant for your gains; poor investment choices can give you poor results.

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    RMDs only apply to trad, not Roth. For tax all Roth are combined, and all trad are combined, but Roth and trad remain separated.
    – dave_thompson_085
    May 10, 2020 at 1:33
  • That's not what I was trying to ask. I was just trying to ask if I contribute to multiple funds, when I retire will I withdraw the money from one consolidated account even though I've contributed to more than one fund.
    – Rich
    May 10, 2020 at 2:48
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    Yes if you contributed to multiple funds in one account. You can have multiple accounts, and in each account can have multiple funds. To withdraw money, you sell some shares of some funds in some accounts - completely your choice.
    – Aganju
    May 10, 2020 at 6:18
  • @Aganju Please consider replacing your answer with your actual answer to the question here in the comments.
    – Eric
    May 12, 2020 at 18:31

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