Rethink Your Rollover

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roth ira providers

Question:  Which are the Best Roth IRA providers?

Hi. Who is a good provider for opening a roth ira with? Should I be looking at a bank or broker style place? Also, is it better to go with one that has certain funds to choose from, or one that you can buy any type of fund?

Thanks in advance for your help.

Answer: An online broker will give you the most flexibility.

Most will also buy mutual funds for you. There are 3 mutual fund companies that have a very wide selection of mutual funds and lower than most expense ratios: Fidelity, T Rowe Price, and Vanguard.

Fidelity and Vanguard also provide brokerage services. As the previous responder mentioned, the mutual fund companies do have a minimum, about $2500. Vanguard is $3000. I believe Vanguard also has an annual maintenace fee on low balances. Fidelity might also.

If I were just starting out with a Roth IRA, I would choose one of those mutual fund companies or Royce Funds, which is only small cap funds, not exactly appropriate for a first time investor. I would then choose one of the world allocation funds to begin with. Doesn’t hurt to be diversified.

Part 4 of Solo 401k vs. Self Directed IRA – UBIT exempt, Participant Loan, and Roth account

roth ira unemployed

Question: Roth IRAs?

Ok, im unemployed, but receive tax exempt money (not disability or unemployment money). my question is, can i still open a Roth IRA?
thanks for not flinging insults guys. (sarcasm, incase you 2 missed it.)
right now, I am disabled and fighting for my life. i was asking because im getting married soon and wanted to take care of my future wife. im looking for all possible ideas, but a job is not an option at this moment.
Dont tell me i gotta pick best answer from these 2?

Answer: Wow, those answers are pretty insulting, aren’t they?? Don’t pay any attention—-tax season is stressful and they probably didn’t mean to be nasty.

Sorry for your disability. I’ve been there, trust me.

Unfortunately, the tax laws don’t give a break to folks who want to save for retirement but aren’t currently employed. You’ll be best off just investing what you can in a plain vanilla brokerage account or money market. Obviously you’ll be taxed currently on any earnings, whether it be interest, dividends or capital gains, but at least you’ll be saving and growing your nest egg.

One thing—once you get married and file jointly, if your wife has earned income and you two are under the AGI limit, you can both contribute to a ROTH then.

Best of luck to you.

Memphis attorney Vincent Perryman discusses Tax Preparation for 2009 taxes with Gus Wilson Part 2

wells fargo ira services

Question: I want to open a SEP IRA, rollover my 401k, and do stock trading…all with one company. Who’s the best?

I use Fidelity for my 401K, Ameritrade for my stocks, Wells Fargo for my checking accounts, INGDirect for my savings account, Chase for my credit cards and HELOC, and WaMu for my mortgage. I’m looking to consolidate a bit, so I don’t have to deal with so many different log-ins and interfaces. I also need to open a SEP IRA before the tax deadline. If I want to at least consolidate my 401K, SEP IRA, and Stock Trading with one company, what company should I go with? Schwab? Ameritrade? Fidelity? WellsFargo? ETrade? A different company? My must-haves are:
1. No/Low Fees
2. Good Customer Service
3. Intuitive Online Interface
4. Fast and easy set up (e.g. account set up, rollover, initial deposit, etc.)

Thanks for your help!!!

Answer: Vanguard will give you the lowest fees.

Schwab will probably give you the best service.

roth ira deadline 2008

Question: Can I withdraw my contributions from Roth IRA tax free?

I opened a Roth IRA account with Ameritrade in february 2009. I have contributed $5000 for the 2008 tax year (before april 15th 2009 tax year deadline) and $2600 for this tax year. I was trading stock with my Roth IRA and got some earnings.
Question: Can I withdraw my contributions ($7600 total) penalty and tax free? Would I need to fill out any IRS forms?
I urgently need that money.
Big Thanks to anyone who gives a well informed answer.

Answer: holding period for Roth is five years
you can probably take out the $2600 contribution for 2009 since the deadline for contribution has not been reached

roth ira tax

Question: How is an increase in value of a Roth IRA taxed?

OK, 6 weeks ago, I had a Roth IRA certificate of deposit (CD) mature. I rolled it over into a Roth IRA with E-Trade. I purches several stocks that I have researched and am confident will increase greatley over the next 18-24 months. All these stocks were all priced under $2.50 each. So if they do recover to prices of 5 or 6 years ago, I could be seeing profits of 20,000 to 40,000 or so.

My question, how is that increase in value taxed?

Answer: Matt, since you already paid taxes on the money before depositing it into a Roth IRA, you do not owe taxes on the earnings if you hold it until retirement. While a traditional IRA is tax-deferred like a 401k and can be funded with pre-tax contributions, a Roth IRA allows you not to pay taxes on the earnings. This is why there are limits on deposits and limits based on your earnings. It is not a complete tax shield, but a way to save for retirement without worrying about actually making money as being something bad.

Personal Investment & Loan Tips : ROTH IRA Qualifications

roth ira withdrawal contributions

Question: I have had a ROTH IRA for two years. Can I withdrawal the amount I have contributed without penalty?

Basically, what I think comes into question is that I have not had the account for 5 years. Does that only come into play when making qualified distributions or would that affect me while only taking out the contributions I have made?

Answer: Hello. From the IRS:
In general, you do not include in your gross income qualified distributions from your Roth IRA. You may have to include part of other distributions from Roth IRA(s) in your income.

A qualified distribution is generally, any payment or distribution made after the 5–taxable–year period beginning with the first year for which a contribution was made to a Roth IRA set up for you, and that is made on or after you reach age 59 1/2, made because you are disabled, made to a beneficiary or to your estate after your death, or that is made to buy, build, or rebuild a first home
Part of any distribution that is not a qualified distribution may be taxable as ordinary income and subject to the additional 10% tax on early distributions. Distributions of conversion contributions within a 5–year period following a conversion may be subject to the 10% early distribution tax, even if the contributions have been included as income in an earlier year. Refer to Topic 558 , Early distributions from IRA’s, for more information.

If you converted your traditional IRA to a Roth IRA, but were not eligible to do so, your conversion will be treated as a taxable distribution from your traditional IRA and a regular contribution to your Roth IRA, and may be subject to additional tax on early withdrawals and an excise tax on excess contributions, unless the converted amount is recharacterized.

Hence, if it were a conversion originally from a traditional IRA, it would be taxable and you wouldhave to pay a 10% penalty. Ten percent penalty is 10% of your income tax liability. So it’s a five year vesting requirement and you get penalized for withdrawing prior to age 59 1/2, unless a govt agency stole your IRA. Then you would not pay the ten percent penalty. Here’s another exception to penalty. I do not see the other 7 exceptions to penalty that the IRS lists regarding a withdrawal from a traditional IRA:
A distribution used to buy, build or rebuild a first home must be used to pay qualified costs for the main home of a first time home buyer who is either yourself, your spouse, or you or your spouse’s child, grandchild, parent, or other ancestor.

Money Matters: Roth IRA Contributions