Category: Roth IRA
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Are You Using a Roth IRA?
While question 3 of 4 is titled “Are you grabbing every tax break you can?“, it’s really just asking you whether you’re contributing to a Roth IRA. A Roth IRA is a retirement account that grows tax-free, your contributions are post-tax dollars but your earnings and disbursement are never taxed. This differs with a 401k…
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Borrowing Money To Fund Retirement
Have you considered borrowing some money to fund your retirement? I’m talking about borrowing some money, perhaps via a 0% balance transfer from a credit card, so that you can contribute more towards either a 401K or an IRA. You might be thinking that borrowing money in order to invest it is a risky proposition,…
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Diversify Your Tax Profile
Taxes change, just like investments do, and in order to be prepared for whatever comes through the chambers of Congress, you have to diversify your tax profile. Simplistically, this just means that you need to have good mix of investments that are both tax-deferred and tax-free. For example, a Roth IRA is a tax-free investment…
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Roth 401k vs. Regular 401k
The Roth 401k was made permanent with the passing of the Pension Protection Act of 2006 last year, though it has been around since 2001, and it does for 401k plans what the Roth IRA did for Traditional IRA plans – it created a vehicle for folks to save after-tax dollars and allow it to…
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Roth IRA or Traditional IRA?
Remember back when you were a child and your parents said you couldn’t do something and it made you really really want to do it? Well, that’s how many people approach the Roth IRA because after you start making more than $95,000 the amount you can contribute to a Roth decreases. Once you earn more…
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Close To Roth IRA Contribution Phaseout
This year will mark the first time I’ve ever been remotely close to the Roth IRA income phaseout (which happens to be $95k – $110k) and in the past I have always tried to contribute to my Roth in a lump sum at the beginning of the year in order to get my money in…
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Roth vs. 401K
My Roth and 401K strategy is to contribute to your 401K until you get your company match, then contribute the maximum to your Roth IRA, then contribute the maximum to your 401K. How does this compare to Walter Updegrave, a Money Magazine senior editor, and his Roth and 401K strategy? It’s exactly the same as…
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Withdraw From Tax Deferred Accounts Last
When it comes time to begin taking disbursements from your retirement accounts, try to take them from your tax deferred or tax free accounts last (401k’s, Roth and Traditional IRAs) because you want them to grow tax-free as long as possible. If you opt to retire before 70.5, the age at which mandatory disbursements begin,…
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Highly Compensated Retirement Contribution Options
When you’re a “highly compensated employee,” you’re limited in how much you’re allowed to contribute to your 401(k). You are limited because the government wants the playing field to be level and it’s “unfair” to lower compensated employees if more highly compensated employees contributions outstrip the percentage for the lower compensated employees. Whether or not…