- How to Buy Real Estate With Your IRA
An IRA, or individual retirement account, may already play an important role in your overall retirement plan. What you may not realize about this kind of tax-advantaged plan, however, is that you can use it to purchase real estate and further… read more…
- Here’s How to Do a Roth Conversion That Minimizes Taxes
One of the costs of converting a traditional IRA to a Roth IRA is how much you will pay in taxes. In some cases, those taxes can be a heavy burden, especially if you have been diligent in building up… read more…
- A Guide to the Pro-Rata Rule and Roth IRAs
Roth Individual Retirement Accounts (IRAs) can prove a powerful tool in your retirement plan, so it may come as no surprise that Roth conversions are a popular method of bypassing Roth IRA income limits. However, many retirement savers are unaware… read more…
- Are IRA Assets Protected From Nursing Homes?
As people age, concerns about long-term care and its financial implications become increasingly significant. Understanding the relationship between individual retirement accounts (IRAs) and nursing home costs is crucial for anyone planning for their future or managing the affairs of elderly family members. While IRAs are designed to provide financial security during retirement, they can also… read more…
- When Should You Consider a Roth Conversion? Vanguard Has an Answer
Deciding between a traditional individual retirement account (IRA) and a Roth IRA can be difficult. Choosing when or if you should convert your IRA funds to a Roth account can be even more daunting. Experts commonly recommend that investors compare… read more…
- How the Roth IRA 5-Year Rule Works With Divorce
A Roth individual retirement account can allow you to save for retirement while enjoying some tax benefits. Getting divorced can affect your savings strategy if you plan to withdraw some of your IRA money or you’re transferring money from it to your former spouse. It’s important to understand how the Roth IRA 5-year rule might… read more…
- How an IRA Is Split During Divorce
Getting divorced can raise some important financial questions, including how to handle the division of retirement assets. If you and your soon-to-be former spouse have individual retirement accounts you might be wondering how to split an IRA in divorce equitably… read more…
- How Does Decumulation Strategy Work?
Because retirees do not earn regular income, they need to save, usually over decades, enough money to cover their costs in old age. A key component of retirement planning calculates your decumulation, which is the rate at which you will draw down from savings to cover your retirement costs. Let’s take a look at how… read more…
- What Is Considered Earned Income for IRA Contributions?
Understanding what qualifies as earned income for IRA contributions is essential for effective retirement planning. If you’re looking to build your nest egg through an Individual Retirement Account, knowing which types of income allow you to make contributions can help maximize your savings potential. Earned income typically includes wages, salaries, tips, professional fees, bonuses and… read more…
- SIMPLE IRA vs. Traditional IRA: Key Differences
Investing for retirement is critical for your long-term financial stability. But which of the several available tax-advantaged investment accounts should you choose? SIMPLE IRAs and traditional IRAs are two options. Let’s explore the details of a SIMPLE IRA and traditional IRA. If you need help sorting out the best option for your unique situation, a financial… read more…
- Alternatives to the Eliminated Stretch IRA
Whether you’ve amassed a small fortune during your working career or have a five-figure IRA you’d like to pass on, one popular way to do so has been the stretch IRA. This strategy will allow you to pass your IRA onto your heirs without many of the limitations that normally apply to these accounts. However, the… read more…
- How Much to Put in a Roth IRA per Month
Setting aside money regularly is one of the surest ways to save for retirement–especially when you take advantage of tax savings over time. Though some retirement accounts are tax-deferred, one popular option that isn’t tax-deferred is a Roth IRA. However, to make the most of a Roth IRA, you need to know how it works… read more…
- Brokerage Account vs. Roth IRA
Brokerage accounts and individual retirement accounts (IRAs) offer two very different ways to invest. A Roth IRA, for example, can offer the advantage of tax-free distributions in retirement while a brokerage account doesn’t cap annual contributions. You might choose to open one account or both, depending on your needs. Understanding the differences between a brokerage… read more…
- How Does a Roth In-Plan Conversion Work?
A Roth in-plan conversion allows employees to shift pre-tax retirement savings within an employer-sponsored plan, such as a 401(k), into a designated Roth account. This process triggers immediate taxation on the converted amount, but future qualified withdrawals become tax-free. Many workplace retirement plans offer this option, though rules vary by employer. Converting pre-tax funds to… read more…
- Understanding the Roth IRA 5-Year Rule
The Roth IRA 5-year rule determines when withdrawals of earnings or converted funds can be taken without taxes or penalties. For earnings, the rule requires that at least five tax years have passed since the first contribution. For converted funds, the clock starts on each conversion, and early withdrawals may incur penalties if accessed too… read more…
- How Much Do You Pay in Roth Conversion Taxes?
Calculating Roth conversion tax involves determining the income tax owed on the amount converted from a traditional IRA or 401(k) to a Roth IRA. Since conversions are taxed as ordinary income, the tax liability depends on the individual’s federal and state tax brackets. For example, if a person converts $50,000 and falls into the 24%… read more…
- How to Convert a Traditional IRA to a Roth IRA
If you have retirement money in a traditional individual retirement account (IRA), you will have to pay taxes on it when you retire and start taking distributions. A traditional IRA is funded with pre-tax dollars. However, if your money is invested in securities in a Roth IRA, that account is funded with after-tax dollars, and… read more…
- Is a Roth IRA Worth It?
Retirement savers fund Roth IRAs with after-tax dollars but can later withdraw earnings free from income taxes. One Roth IRA benefit compared to other retirement accounts is that savers don’t have to start withdrawing funds at age 72. Roth IRA owners have limited access to earnings on contributions until age 59.5, however. And their overall… read more…
- How to Contribute to an IRA
An individual retirement account (IRA) can be a useful tool for retirement planning. You can open an IRA and contribute funds in addition to the money you’re saving in your 401k at work or as a replacement for a 401k if you don’t have a workplace retirement plan. As for how to contribute to IRA… read more…
- How and When to Use an IRA to Buy a House
You may be considering dipping into your retirement savings to buy a residence, come up with a down payment or cover closing costs. There are plenty of pros and cons when it comes to using your IRA to pay for… read more…
- Roth IRA Investments to Consider
When you are saving for retirement, it’s best to do all the necessary research about what types of investments should go into each of your retirement accounts. The types of investments you should put in a traditional individual retirement account… read more…
- Bitcoin IRAs: A Guide for Investors
Retirement savers are no longer limited to traditional assets like stocks, bonds and mutual funds. Instead, they can now invest in cryptocurrency through self-directed individual retirement accounts known as Bitcoin IRAs. Despite carrying the moniker of the world’s first and… read more…
- Understanding How Auto-IRA Plans Work
If your workplace doesn’t offer a retirement savings plan, such as a 401(k), you may be left wondering how you can adequately invest for the future. Thankfully, many states are now sponsoring auto-IRA plans in an effort to bridge the retirement plan coverage gap that exists for many employees. Let’s take a look at what an… read more…
- 403(b) vs. IRA: Key Differences
In the process of saving for retirement, you’re likely to come across both 403(b) and IRA account options. While both of these can offer you similar benefits, there are some very important differences to note between the two accounts. Here’s a… read more…
- Biden’s Build Back Better Could End These Retirement Loopholes
With the passage of the $1.2 trillion bipartisan infrastructure bill, all eyes in Washington have now turned to the $1.85 trillion Build Back Better bill. With both bills combined, Congress would invest more than $3 trillion in infrastructure, education, climate and social programs. The Democrats have scaled-back the Build Back Better bill significantly down from… read more…