Rethink Your Rollover

Posts Tagged ‘roth-ira’

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 qualifications

Question: How much to put in IRA?

I am thinking of getting an Roth IRA, but I was deciding how much to put in. I was wondering if I put $5,000 in, would that be good. I heard with these accounts you can accumulate over million a dollars. I am 18 now, what age will it be when I will be able to take money out. Also where can I go to get an IRA and isn’t there some qualifications to open up one? To tell you the truth I have no idea what to do, and these IRA is so confusing. Anyone can explain and give examples. I would greatly appreciate it. By the way i appreciate every-ones responses to me question before. It helped a lot.

Answer: If you are able to put the maximum in, then do that. If you are able to contribute at least $3,444 per year, on average, and you manage an average annual return of at least 6%, then you will have $1 million in 50 years.

If you contribute at least $5,000 each year, you’ll have $1.5 million in 50 years if you average a 6% annual return. This is a fairly conservative estimate of your earnings. If you are invested in the stock market for a 50-year period and you manage a 9% average annual return, then your amount at age 68 would be $4.6 million!

Or, let’s say you want to retire at age 59, which is the earliest you can withdraw earnings from a Roth IRA without a tax penalty. Contribute $5,000 each year until you’re 59, and you’ll have over $2 million dollars by then, assuming a 9% average annual return.

A good choice for an IRA is a discount brokerage, such as Vanguard. Their fees are very low, and over time that will make a huge difference in the amount of money you have available to you at retirement.

I suggest you consider a broad market mutual index fund, such as the Wilshire 5000. This offers you a great amount of diversification with very low management fees. Index funds outperform managed funds about 90% of the time.

By the way, you can withdraw your contributions from a Roth IRA at any time without paying taxes or a penalty. Just be careful not to touch the earnings. And, don’t be tempted to withdraw from your Roth IRA unless it really is an emergency. Any amount you withdraw will have a big impact on how much you are able to accumulate by retirement.

Personal Investment & Loan Tips : Bank Loan Tips & Advice

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 taxation

Question: Is it legal and all to have both a Standard Accounts with my discount online broker and a Roth IRA?

Notice I’m not asking if it is ok to have a IRA and a Roth IRA. I’m asking is it legal and all to have a Standard Account and a IRA whether regular IRA or Roth.

So with the Standard I can withdrawal whenever without penalty with taxation an all when the time comes around and save for retirement a million years from now with a Roth.

Answer: Yes.

Roth IRA CONVERSIONS

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?