Roth IRA or growth mutual fund?

I am currently married and my wife and I wondering if we should open Roth IRA's for each one of us or put our money together and invest in a no load growth mutual fund. I know the mutual fund would be taxed every year but I think we could compound more money this way in the mutual fund and later roll the funds into a Roth IRA. What is the best way to deal with this situation?

Why don't you just open Roth IRAs that ARE invested in the growth mutual fund? You can only "roll" $4000 ($5000 if over 50) into a Roth IRA each year - that is the contribution limit.

Buying an investment inside a Roth IRA will produce a higher IRR (internal rate of return) than buying that investment outside a tax shelter. The only downside is that your money is somewhat tied up until you turn 59 1/2 -- although you can retrieve your principal contributions without penalty before that if you really need to.

You cant roll a mutual fund into an IRA. You can only add the maximum IRA contribution every year. You can only roll an existing retirement account into an IRA. The point of an IRA is for the earnings to grow tax free. It doesnt make much sense to pay taxes on the earnings and roll it into a tax free account after the fact. The idea is to maximize tax deferred income. With a mutual fund you can take money out without penalty. Thats the idea of a mutual fund. To get a higher return on money you dont need now, but that you could get at before retirement if you needed it, without penalty.