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IRA

Recharacterizing

How much do you know about recharacterizing IRA contributions? I bet it’s not enough to keep yourself out of trouble, if the need arises…

Determining Your MAGI

Do you know how to calculate your MAGI (Modified Adjusted Gross Income)? It’s important to know when you’re contributing to an IRA.

Remember Your RMD

It’s getting close to the end of the year and that means many individuals need to take their required minimum distributions (RMDs). It also means that there will be individuals who must begin taking their required minimum distributions as they will have reached the magic age of 70 ½. For those already taking RMDs, check with your advisor or asset custodian and find out the amount you need to take and how you can receive payments. In most cases, RMDs can be taken in an annual amount, or monthly via check or direct deposit. The specific RMD amount is based on the account balance as of December 31st the previous year and your age. You can use the RMD calculator found here to get an idea of your RMD amount. Additionally, be sure to account for any taxes you might owe. For 401k type plans, 20 percent will be withheld […]

IRA Distribution Pro-Rata Rule

How does the pro-rata rule for IRA distributions work? Can it cause problems as I implement the back-door Roth conversion strategy?

5 No-No’s for IRA Investing

It is generally well-known that in an IRA account you have a wide range of investment choices. These choices are typically only limited by the custodian’s available investment options.  However, there are specific prohibited transactions that cannot be accomplished with IRA funds. Often these prohibited transactions can cause your IRA to be disqualified, which can result in significant tax and penalty, along with loss of the tax-favored status of the funds. What’s Not Allowed for IRA Accounts? Self-Dealing.  You are not allowed, within your IRA, to make investments in property which benefits you or another disqualified person.  A disqualified person includes your fiduciary advisor and any member of your family, whether an ancestor, spouse, lineal descendant (child) or spouse of a lineal descendant.  It is important to note that this limit applies to both present and future use of a property. So if you purchased a condo and rented it […]

The Earliest Age You Can Withdraw Retirement Money Without Penalty

Do you know what is the earliest age you can be and still be eligible to withdraw money from a deferred retirement account without penalty?

Where To Establish Your IRA Account

There are many institutions where you can establish your IRA account. This article reviews the pros and cons of the main options.

Public Safety Employee Retirement Plan Withdrawal at Age 50

There is a special exception to the retirement plan early withdrawal rules for a public safety employee, who may start withdrawals as early as age 50.

Higher Education Expenses Paid From an IRA

An IRA can be used to pay for higher education expenses. This avoids the penalty for early withdrawal that occurs if you’re under age 59 1/2.

Traditional IRA v. Roth IRA – Compare & Contrast

What are the differences and similarities between traditional IRA and Roth IRA? This article gives you the basics in a comparison and contrast.

Calculating your Required Minimum Distribution

Learn how to calculate your required minimum distribution for your IRA, 401k, 403b or other qualified retirement plan.

April 1 is the deadline for first RMD

If you’ve reached age 70½ in 2016, you must take a required distribution from your IRA by April 1, 2017.

Adjusting Withholding Saved 44% of the Tax Bill

Adjusting withholding on your income taxes can produce some surprising results. See how one taxpayer saved 44% in taxes by adjusting his withholding.

Tax Impacts of Early Withdrawals from Your IRA

When you make early withdrawals from an IRA or other retirement plan there are tax ramifications, depending on the circumstances of your withdrawal.

Rollover Risk

The idea of an IRA rollover, or a rollover IRA, isn’t necessarily a cosmic mystery – this happens all the time.  You leave your job, and you rollover your 401(k) to an IRA.  No problem, right?  Unfortunately, there often are problems with the process of moving funds from one account to another – because there are a couple of very restrictive rules regarding how this process can and cannot be done.  It’s not terribly complex, but you’d be surprised how easily these rules can trip you up. Rollover Risk Let’s start with a few definitions: A Rollover is when you take a distribution from one qualified plan or IRA custodian, in the form of a check made out to you, and then you re-deposit that check into another qualified plan or IRA account (at a different custodian). A Trustee-to-Trustee Transfer (TTT), even though it is often referred to as a […]

How to Make Your Saving Automatic

Sometimes it can be difficult to save for emergencies or for retirement. While physically not demanding, the mental strain can be a hump that is hard to get over. In other words, we experience a little bit of “pain” or mental anguish if we have to physically hand over money or write a check. So how can we overcome this anguish? Automate. First, determine how much you need for an emergency. This can either be to start the fund or to replenish amounts that have been used. Generally, it’s a good idea to have 3 to 6 months of non-discretionary expenses (expenses that don’t go away if you lose your job or become disabled) set aside in an FDIC insured bank account. Some individuals may find it more comforting to have 6 to 9 months or 9 to 12 months. It’s up to you. For retirement, I recommend saving 15 […]

Penalties for Changing SOSEPP

What are the penalties for changing your SOSEPP? If you don’t know, that’s another name for a 72t distribution. IRS has some severe penalties if you change your payment plan.

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