Rethink Your Rollover

Posts Tagged ‘ira’

ira higher education

Question: Going to Grad School: So Invest in 410k or IRA or Anything Else?

So I have just landed a job out of college, but I am planning to leave in 2 years in order to go to Grad School (MBA).

My company offers me 410K, however I won’t get the benefit of matching fund if I leave before 2 years, and only 20% of the amount invested if i leave 2-4 years.

So these lead me to possibly do an traditional IRA investment, which I can play around a little in what I can invest in so. Also I heard that there are exceptions for higher education so I won’t get the 10% penalty.

However, I’m still not sure what the best options are. I’m not expecting huge returns b/c I’m only investing for a short term: but I do want to do what I can in terms of earning/saving some extra money for college.

Thoughts? Suggestions?

Thanks.

Answer: Well you might as well invest in the 401k upto your co’s matching percent because it’s free money. Also put what you can in a traditional IRA and yes you would get the education exemption.

Conversations with History: Ira Michael Heyman

Roth IRA basics

Question: What time of investments should I look into making?

I’m 21, soon graduating from college, and am interested in diving into some investments. I already have a Roth IRA, but am curious as to what other ideas I should consider (i.e. bond funds, growth v. value). I know the very basics of investing but not enough to feel comfortable to jump right in. Any investment advice would be greatly appreciated. Thank you in advance.

Answer: Congratulations on starting an investment program so early. If you want to invest for the long term (money you won’t need for at least ten years), at your age you should definitely look to stocks or, if you don’t want to pick individual stocks yourself, stock mutual funds. Until you develop more experience and confidence I’d recommend buying shares of some no-load mutual funds with low expenses. Three of the best places to look are vanguard.com, fidelity.com, or troweprice.com. Go with stock funds, and agressive stock funds at that including REIT funds (Real Estate Investment Trusts), Small Cap stock funds, and International Funds. Over periods of ten years or more stocks will outperform bonds-at your age I’d forget the bond funds. Growth has lagged behind value for years-each year I hear that this is the year growth comes back and each year it doesn’t. It will eventually but nobody knows when. Put what you can into your fund(s) each month (known as dollar cost averaging) rather than investing a large chunk all at once so if the market drops you don’t lose a lot right away. Stick with it and, because you are starting so early, you won’t need to worry about retirement.

Suze Orman Roth IRA Rollover in 2010 for 401k’s

Roth IRA qualified distributions

Question: Form 8880 line 4 – do they mean all distributions or just the non-qualified ones?

In 2007 I “cashed out” 3 of my mutual funds in my IRA account. These were separate funds from the Roth IRA that I want to contribute to this year. The amount that I cashed out was in an IRA that was 10 years old. I did not make anything on this IRA and did not pay taxes on that money since it was not money earned while in the IRA.
My question: do I need to report this on line 4 of the 8880 form?
Thanks

Answer: If you took money out, it’s a distribution. So, yes, you must report it.

roth ira information

Question: Rollover IRA (is it Roth or traditional?)?

I have a rollover IRA (from an old 401K). I am considering funding it more so I started searching online but there is virtually no information re:Rollover IRAs. They either talk about Roth or traditional. So what category does my Rollover fall under?

Answer: Neither AND both. A rollover IRA simply means the funds came from another retirement plan. That is ALL it means. EVERY IRA is either a traditional or a ROTH. In most cases, a 401(k) is rolled into a traditional IRA.

Should You Convert Your IRA To A Roth IRA?

Roth IRA conversion 2009

Question: In 2009 I am considering converting $200,000 in a Rollover IRA to a Roth IRA (I’m 44). ?

The amount converted will be taxed as income. I would not be able to pay all the taxes on this conversion by April 15, 2010. Would the IRS allow me to pay in installments over time? If so, what is this called by the IRS? (I want to do additional research on this).

Thanks,

Answer: I believe in 2010 you will be able to convert and pay the taxes over 2 years. You may want to wait until then. Also, do you meet the income limitations? Single contributors cannot make more than around $100,000. That will also go away in 2010. You certainly can convert part of it this year. Also, I think ( but am not positive check with an accountant) that you can pay the taxes out of the IRA itself–so you would have the tax money.

No RMD in 2009? Time for a Roth IRA Conversion