Concerned about overpaying taxes on your IRA distributions? It’s a valid worry but one that you can address if you have the right information. First, you need to know what kind of contributions you made—pre- or post-tax—and to what type of account. Keeping good records is key. Key Takeaways Most contributions to an IRA are […]
Read MoreIf you don’t need your required minimum distributions (RMDs) from your traditional IRA for living expenses, can it be reinvested in a Roth IRA? Yes, it can—assuming you are eligible for a Roth based on your income. This is because the money to fund your IRA can come from any pool of cash you have […]
Read MoreThe major appeal of Roth IRAs is that, if you follow the rules, your withdrawals will never count as income and, as a result, be totally tax-free. But the rules differ depending on whether the money you withdraw represents your contributions to the account or the account’s earnings over time. This article explains when your […]
Read MoreRoth IRAs are popular accounts for investors to leave to their heirs because of these accounts’ tax-free status and lack of required minimum distributions (RMDs) during the original owner’s lifetime. Roth contributions are made with after-tax money, and any distributions you take are tax-free as long as you are at least 59½ years old and […]
Read MoreThe Roth IRA has skyrocketed in popularity with Americans looking to stash money away for retirement. In mid-2020, Roth IRAs were held by 26.3 million U.S. households, or 20.5%, according to data from the Investment Company Institute. The Tax Cut and Jobs Act (TCJA), passed in late 2017, also provided a boost for Roths: The […]
Read MoreThe Internal Revenue Service (IRS) has announced that contribution limits for 401(k)s, 403(b)s, most 457 plans, thrift savings plans (TSPs), and other qualified retirement plans will rise by $1,000 for 2022, going from $19,500 to $20,500. However, contribution limits for individual retirement accounts (IRAs), whether traditional or Roth, will remain the same at $6,000. In addition, the […]
Read MoreThe withdrawal rules for Roth individual retirement accounts (IRAs) are generally more flexible than those for traditional IRAs and 401(k)s. Still, you’ll want to do your homework before making any Roth IRA withdrawals. If you don’t meet certain requirements, you could end up owing taxes and a 10% early withdrawal penalty. Key Takeaways Withdrawal rules […]
Read MoreIf you’re considering leaving a job, and you have a 401(k) plan, you need to stay on top of the various rollover options for your workplace retirement account. One of those options is rolling over a traditional 401(k) into a Roth IRA. This can be a very attractive option, especially if your future earnings will […]
Read MoreEarning a higher income may seem like the key to a more comfortable retirement, but it can actually be a barrier to some kinds of tax-advantaged retirement savings. That’s because a larger salary can shut you out of contributing to a Roth IRA. For 2021, Roth IRA contributions are not allowed for single filers with a […]
Read MoreThe Internal Revenue Service (IRS) gets a little grumpy if you contribute to a Roth individual retirement account (Roth IRA) without what it calls earned income. That usually means you need a paying job—either working for someone else or for your own business—to make Roth IRA contributions. But what if you don’t have one—a job, […]
Read MoreRoth IRA vs. traditional IRA: which is better for you? What’s the difference between them? Roth IRA Vs. Traditional IRA The short answer is that you should use the one that leaves you more money after you’ve paid taxes. That generally boils down to one factor: if you expect your tax rate to rise when […]
Read MoreWhile most people receive Social Security, a secure financial retirement depends on also having significant savings in a retirement account. Typically these savings must last nearly 20 years (assuming the average age for retirement is 63, and the average life expectancy as of 2021 for someone who reaches that age is 12.1 more years for […]
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