Rethink Your Rollover

Posts Tagged ‘investment’

Roth IRA brokerage account

Question: i have 35k i invest and every year i sell about 3k worth of stocks and fund my IRA, make sense tax wise?

i sell 3k and pay taxes on that 3k each year, then turn around and put it into my Roth IRA and invest it. i mean the only other legit option i see is either putting the portion of my paycheck into my roth instead of into my core brokerage account and investing it, this way i’m not paying taxes on the earnings, or, what’s my other option?

Answer: Whether you should sell 3K of your stocks or use your paycheck to fund your roth depends on what you expect to happen to the stock you are selling. If you think it’s going to go down, yes sell it. Another factor is that if you sell stock thats already lost value you can deduct the loss on your taxes.

Beginner Investing : Roth IRA Facts

Roth IRA spouse

Question: In transfering a 401k to a Roth IRA (after leaving an employer)?

does an employee need to pay taxes? What if their spouse is on Social Security Disability and they normally pay no taxes?

Answer: Yes. You should roll the 401(k) over into a traditional IRA first (both are pretax accounts). Then look at converting from a regular to a Roth IRA. The difference is that Roths are funded with “after tax” dollars. You can’t roll “before tax” dollars into one without tax consequences.

Retirement Plans & Investments : Can You Contribute to a Roth IRA for Your Spouse?

sep ira loans

Question: Should I use my SEP IRA to pay off my debt?

I have a Sep IRA from my old job that I do not and have never paid into that would cover my student loan and most of the rest of my debt. I’m in a debt management program, which gives me a decent interest rate on the debt I incurred when I was not able to work. But I am left with little/no disposable income & a stinky credit rating. I’m scheduled to be done in 4 more years, but I’d like to have some disposable income & be able to build a little emergency savings while fixing my credit ASAP in prep for buying our 1st home. Just waiting for hubby to finish his Master’s and secure a new job in the Fall.

I have a 401k at my new job and I try to make a little money on the side, but don’t have a lot of time for that with a 3 month & 3 yr old. So, I’m working extra hard at the 9-5 to target a raise in the Spring. I just want some peace of mind, to be able to afford a haircut once a quarter and to see the possibility of home-ownership sometime…

Can anyone suggest a good plan?

Answer: The tax consequences of early withdrawal before age 59 1/2 from any retirement account will be 10%. If you are willing to accept this fact, then by all means, use your IRA funds to pay off the debt. I wouldn't suggest you do that because you will lose the earning power if you withdraw money from the IRA. Your SEP IRA may or may not be growing at all since you don't work there anymore. So it may be wise to roll it over into a Traditional IRA. Then 12 months after that, roll it over again into a Roth IRA.

Here is what I would do if I were in your situation:
1) Create a budget worksheet. That way you can analyze your monthly spending and where you can save money on. The budget worksheet should list everything you spend on, from food, gas, car, insurance, maintenance, entertainment, utility, personal maintenance (ie haircut), clothing, child support, etc.
2) Stop contributing to your 401k
3) If you have any insurance (car, life, etc), shop around for a lower premium.
4) Whatever money you save, use it to pay off the principal balance (if there's no early payment penalty on the loan)

What is Private Money Lending and How Safe is your Money?

ira real estate investment

Question: Examples of IRA investing use a rate of 8+% compounded int. Which IRA invs did this well over past 10 yrs?

I do not know of any 401K or IRA available investments in any of the plans I have from 3 jobs that would have provided an actual return any where near 8-9% compounded interest per year over the past 10 years. What real investments would have done this well among commercially available mutual funds (growth, small cap, bond, etc), and how do I pick one of those? I’ve never seen one. The good picks are break even over that time period, and the absolute best choices may have increased by 50% in 10 years. I don’t see how anyone doubles or triples their retirement investing in 10 years. It seems like a game played by financial advisors to take people’s money. You would have been better off buying real estate in NYC than investing in your retirement by 100, 200% or more.

Answer: Have you even looked at a mutual fund screen? There are tons out there that beat your 8% bogey. Your claim that the best ones are breakeven over 10 years is absolutely ludicrous. Here are a couple of very, large very well known funds that I can think of off the top of my head...

American Funds Growth Fund of America (the largest mutual fund out there) 10 year average return: 12.94% as of 12/31/06

Legg MAson Value Trust 10 year average annual return: 12.14%

Marsico Growth: 10 year average annual return: 8.16%

Fidelity International Discovery: 10 year average annual return: 11.24%

Atlanta|Self Directed IRA|Real Estate Investing

Roth IRA real estate investing

A recent book titled: “Boomers-Bank Financial Intelligence for Real Estate Investing” explains clearly why you should invest in real estate using your retirement plan? In the book, the author discusses several concepts for buying real estate using IRAs and 401(k)s; the so called nontraditional investments.

 

In this article, I am going to take a look at four of the top reasons outlined in the book:

 

1. Tax Free Income

 

The book starts by asking what advantage is there to all of this? Why not just let your IRAs and 401(k)s sit around and do whatever it is they’ve always done? Well, you can secure tax-deferred or tax-free income for one thing. Anytime you have a profit or a gain, either you are not paying taxes on the gains until you start using the money, or if it is in a Roth IRA, you aren’t paying taxes at all.

 

2. Zero Capital Gains

 

By having real estate in a retirement plan, you are also avoiding what’s known as capital gains every time you sell property.

 

3. Compounded Interest & Reinvestment Option In Troubled Times

 

Your money is allowed to accumulate and your interest will compound Moreover, you can put all of the money back into your next deal. However, you’ve got to bear in mind the current state of the economy. Money doesn’t just sit around these days. In most parts of the world, the dollar is losing value at a pretty alarming rate.

 

The United States is a country at the edge of a financial and economic precipice, owing trillions of dollars to other countries and borrowing money against, well, the value of its existing borrowed money.

 

The infrastructure of the United States is at present rather unorganized. We aren’t producing much and so we’re importing more than we’re exporting. It’s basic mathematics. Notice how the prices of food and gas have been rising recently. That should give you a pretty clear idea of what’s going on and what is likely to continue to happen.

 

4. Strength Of Non-traditional Investment

 

The main focus of this book, however, is to demonstrate the value of nontraditional investment choices for 401Ks. The goal is not only to introduce you to the reasons why these choices are advantageous, but it is also to explain the particulars of the related processes.

 

For the sake of helping you confront your financial advisor or accountant, the book discusses the various strategies for undertaking this type of investment. It also takes you through the processes for finding appropriate real estate to undertake the actual investment.

 

Since the property market can be a bit difficult to navigate, particularly if you’re a beginner, you can benefit from the author’s wealth of experience and wisdom on the subject that the book represents.

 

About the Author:

To get a free e-Manual and Coaching on how to invest in real estate, using
IRA-401K funds, on the basis of the recommendations in the book,
Boomers-Bank Financial Intelligence for Real Estate Investing, visit:
http://blog.ira-401k-RealEstate.com .

John Krol is an expert on investing in real estate and wants to help people
by sharing his expertise.

Source – 4 Reasons Why You Should Invest in Real Estate

Atlanta Real Estate Investing Using IRA|SELF DIRECTED IRA|Roth IRA