Rethink Your Rollover

Posts Tagged ‘money’

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 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 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 tax free

Question: I want to rollover my traditional ira to a Roth IRA verses?

I only have $5000 in traditional, and want to roll it over now because i’m taxed in the 15% tax range. And when i but it in a Roth IRA, it’ll be tax free when i take it out when i retire. Verses the traditional ira, which would be taxed at a higher rate when i retire in 20 years, ( that is if i’m in a higher tax braket). Does this sound like a smart thing to do?

Answer: I use the rule that if I’m in a 15% tax bracket or less, I move IRA money…if I’m in the 25% bracket, I don’t.

I’ve seen many retirees have *higher* tax rates in retirement than they do in the years before….

Roth IRA: Building a Tax-Free Retirement on Money Smart Radio