In the past few months, we?ve shown you how simple mistakes and oversights in planning for the distribution of your family's IRAs (and other retirement plans) can cost you and your beneficiaries anywhere from a few thousand to millions of dollars in excess, unnecessary taxes. We?ve alerted you...more
At some point you may come into a large sum of money or property as the beneficiary of a deceased IRA holder or from a distribution to you as a retirement plan participant. Understanding the tax consequences may prove helpful. IRA Beneficiary As an IRA beneficiary you have several...more
Millions of employees will change jobs this year through career moves, layoffs or retirement. If you are one of these employees, chances are that this change has left you with a lot to think about. And one important decision you need to make is what to do with your retirement savings. You have...more
In tax planning, the goal typically is to delay the payment of income taxes. Thus, it can be difficult to understand why it might make sense to convert a traditional individual retirement account (IRA) to a Roth IRA, which results in the current payment of income taxes. Factors that favor...more
The distribution rules for inherited individual retirement accounts (IRAs) generally make it advantageous to separate accounts for each beneficiary, which can be done during your life or by December 31 of the year following your death. If you plan to leave an IRA balance to several beneficiaries,...more
Individual retirement accounts (IRAs) are typically viewed as retirement planning vehicles. But with increased contribution amounts and the ability to roll over 401(k) balances to a traditional IRA, many IRA owners are finding they won't use their entire balance for retirement. Thus, IRAs are...more
Even though Roth individual retirement accounts (IRAs) have been around since 1998, many investors aren't aware of all the differences between traditional and Roth IRAs. Thus, they aren't sure which IRA is the better alternative for them. As a summary, the unique features of a Roth IRA...more
The tax laws regarding withdrawals from individual retirement accounts (IRAs) are complex. To avoid unnecessary penalties and to ensure you withdraw the funds efficiently, let's review the basics: Before Age 59 1/2 In addition to any income taxes that may be due, withdrawals before the age of 59...more
Once your children start working, help them develop good savings habits by encouraging them to fund an individual retirement account (IRA). Even if your child only contributes for a few years, an IRA can provide significant funds for retirement. Your child must have earned income to contribute...more
You're about to retire, have just retired, left a company to take another job, or have been downsized. You have built up a sizable retirement account, so: Now what? You're going to get the biggest check of your life & your lump-sum distribution. Surely this calls for some thought or pre-planning...more
Many may not consider the possibilities that a Roth IRA can offer an estate plan. But, there are three advantages that a Roth IRA can offer if your estate value is under the Applicable Exclusion Amount ($1.5 million in 2005, and $2 million in years 2006 & 2007) and if one of your planning goals is...more
As the World War II generation begins to die, leaving their IRAs to their heirs, there will be an epidemic of problems pertaining to withdrawals. The point at which your IRA transfers from your name to another can be the most critical time in the lifespan of an IRA. The next critical area are ...more
The Economic Growth and Tax Relief Reconciliation Act of 2001 promised to deliver important benefits to nearly every American. The Act included tax-rate reductions, child credit increases, marriage penalty relief, education funding incentives, retirement plan enhancements, and much, much more. ...more
This is a true story and the names have been changed to protect the parties involved. A man retires from his employer in the mid 90's and decides to 'roll' his 401(k) to a retirement plan with NFS, LLC (a company owned by Fidelity that we use as custodian for some of our accounts.) At the time...more
If you're changing jobs, it's important to understand the options you have for managing your IRAs. With employees changing jobs more frequently than ever before, it's rare to find someone who has worked his or her entire life for the same company. Whether or not you have recently changed jobs or...more
In 1974, the Individual Retirement Account was introduced as a retirement savings tool. Thirty years later, contribution limits have increased, and there are several types of IRAs available. As the largest tax cut in almost two decade, the Economic Growth and Tax Relief Reconciliation Act of 2001...more
For some Individual Retirement Account (IRA) holders who are approaching the mandatory distribution age (April 1st of the year after the year they attain age 70½), their primary concern may be stretching their account assets over their lifetimes and those of their spouses. Maximizing tax deferral...more
Should you convert a traditional IRA to a Roth IRA after retirement? With retirees enjoying longer lives these days, a post-retirement conversion to a Roth IRA could have advantages for certain investors. A Roth IRA can be a good savings vehicle for those still working, thanks to the tax-free...more
Turning 70 soon? Happy Birthday! If you own an IRA, your 70th birthday is significant too. During the year you turn seventy years and six months of age, you must begin to make taxable withdrawals from your Individual Retirement Account. You are responsible for knowing when to begin these...more
The Taxpayer Relief Act of 1997 introduced a new Individual Retirement Account (IRA) called the Roth IRA. The primary inducement to make contributions to the new Roth IRA is that distributions are tax-free if certain conditions are met. One drawback to the Roth IRA is that contributions to the...more
For many people, postponing distributions from an Individual Retirement Account (IRA) as long as possible is a good retirement strategy. It lets you continue to enjoy the benefits of tax deferral, which can make a significant difference in your account growth. But not everyone has the luxury of...more
Who should benefit from your retirement assets - you and your family or the federal tax coffers? The answer is easy: you and your family, of course. Achieving that goal is more difficult. These days, very few people stay at one job for their entire careers. So, by retirement, you and your spouse...more
Here's an idea that can keep on giving to children and grandchildren long after the gift-giver, perhaps you, has moved on to that great stock market in the sky. It's called the Stretch IRA. 'Stretch' refers to setting up an IRA so that required distributions, or withdrawals, may continue for many...more
There are more ways to generate wealth than relying on what Wall Street has to offer. One of the better alternatives, in fact, is to invest in reducing your taxes. You may have made $1 million in the market last year, but if your marginal tax rate is 35%, in an extreme case you could possibly...more
The twenty-first century brought an influx of new wealth to holders of IRAs, 401(k)s and similar plans. That meant new tax liabilities as well. But, there is a way to extend the tax-deferred status of an IRA long after your death. Called multigenerational or "stretch" IRAs, they also are a way to,...more
Over the last several years, we have read and heard much about the 'stretchout' IRA. Many IRA holders have painstakingly learned about the extreme complexities of Required Minimum Distributions (RMDs) and the ability to provide a stream of income to their beneficiaries at their death. Planners...more
Are you tired of buying the same old investments for your individual retirement account. (IRA)? You don't have to. Any IRA, whether traditional, Roth, SIMPLE or SEP, can invest in just about anything except life insurance, S-corporation stock and collectibles such as stamps, art and antique...more
Ideally, a long-term retirement savings program is comprised of 3 basic components: Personal Savings Company Pensions Social Security With Social Security being well on its way to bankruptcy within the next 4 decades (just read your statement if you don't believe me), and company pension plans...more
At some point, you decided to save money for retirement. You filled out the forms, selected some investment options, and now you routinely toss the statements in the drawer after a quick glance making a mental note of whether it has grown or lost value since the last time you looked, mostly by...more
One key component of the Roth IRA that is rarely mentioned is the sunset tax provision that mandates these tax free savings vehicle options will cease to be an option unless the provision is renewed in 2010. What this means to you and your investment planning is that these accounts need to be...more
There comes a time when your surviving spouse, children and others will inherit your Individual Retirement Accounts (IRAs), yet you would like to control the distribution of those assets after your death. Perhaps your heir is not interested in managing the investments, has potential creditor...more
Most people have heard the terms `IRA? and ?Roth IRA?. Many are familiar with the idea of an IRA to Roth IRA conversion, and may have completed these already on some accounts. The first issue to be address, is do you qualify? If Modified Adjusted Gross Income (MAGI) is below $100,000, and you...more
Designating an IRA beneficiary is almost an afterthought for most IRA owners. Lack of attention to this seemingly simple procedure can create costly tax impacts for beneficiaries. The growth of IRA values in the last ten years has been staggering. It is not uncommon to see seven figure IRAs...more
Does the idea of a millionaire's lifestyle appeal to you? Ocean cruises around the world, vacations abroad, sailing on a yacht, shopping in Paris?all might be your idea of how a millionaire lives, but that is not reality according to Dr. Thomas Stanley who has made a career out of studying...more
Current Rules: There are several rules that govern your ability to do an IRA to Roth IRA conversion as well as contribute to a Roth IRA today. For years before 2010, if your modified adjusted gross income is greater than $100,000, you can't convert a regular IRA to a Roth IRA. If your...more
Recently I have seen a few erroneous or incomplete comments regarding Roth vs. traditional IRAs. Since: The "Roth" 401k authorized in the 2001 tax act has gone into effect beginning in 2006, Beginning in 2005 the $100,000 AGI limit on IRA conversions does not include RMDs making them...more
Individual retirement accounts are appropriate for any wage earner or self-employed person who plans to retire, can afford to give up ready access to the funds invested, and requires savings outside Social Security and employer-sponsored plans. In essence, IRAs can work for just about anybody...more
By?Barbara Hernandez January 6, 2014 The primary concern of many investors is their return on investment. It's easy to get hung up on ROI and obsess about every percentage point, but the reality is that if investors haven't protected their assets, they're sitting ducks. Missing one stoplight,...more
By Justin Stoltzfus. The IRS hasn't generally been known for its straightforwardness and efficiency, but issues around this year's tax refund checks are, in a lot of ways, a whole new ballgame. Refund problems often hit those who would otherwise have a pretty smooth filing process, where 1040...more
By James O'Brien By now, many investors and analysts have taken a look at President Obama's MyRA plan and drawn a reasonable conclusion: It won't get retirees through many years of post-work expenses. But then, that's not the MyRA's purpose. The federal government's newest retirement instrument...more
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