Rethink Your Rollover

Posts Tagged ‘traditional’

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

stretch IRA Roth

Question: Should I stop contributing to my 401-K?

Currently, I’m contributing 12% of my salary (or roughly $7,500) to my company’s 401-K. They offer no match. I also have a Roth IRA I’ve been trying to contribute the maximum $5000 to each year (which is a stretch for me now that I’ve bought a home). With talk of higher taxes down the road to pay for the national deficit, does it make better sense to stop contributing to my 401-K and, instead, only put money into the Roth? What would be the pros and cons to this, and is there a better way to go about my retirement that I haven’t considered?

Answer: When Obama breaks his promise to help pay for the massive deficits he’s running up your taxes indeed will go up. At that time to limit taxes on your income you will want to be contributing tax free dollars to your 401K. After you retire your tax bracket will probably be lower so that dollars you’ll be taxed at should be at a lower rate. Unless of course Obama really screws this up, but then we’ll really be in a mess.

Continue to contribute the most you can to both retirement accounts. The government will be too bankrupt to help you with your retirement by the time you’re 65.

The Incredible Hulk – Ed Norton Tim Roth, New Trailer * iHD

sep ira deadline

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.

Reeling in the Years 1998-1

traditional ira vs 401k

401k CODA-Cash or Deferred Arrangement Plan

There are many ways you can begin saving for retirement. One of the more popular options is a 401k plan that is offered by your employer. These plans are sometimes referred to as CODA, or a cash or deferred arrangement plan. The plan allows an employee to make contributions from their pay. These contributions can then be matched by the employer. Many companies offer 401k plans to workers as a way to help save for retirement.

A 401k plan has many advantages. One of the main advantages is that it allows you to make contributions from your pay check before any taxes are taken out. These pre-tax funds that are contributed to the plan are not taxable until you begin to make withdrawals. This usually creates a debate about which is the best IRA: Roth vs traditional IRA.  An even better retirement plan for the wealthy making more than $116,000, the Roth on Roids™ is the best because of the lack of restrictions and the phenomenal benefits.

Most companies will match contributions up to a certain amount. Typically, a company will match up to 50%, but there are companies that will match 100%. In some cases, employees may have the option of a profit sharing plan. This is when payments can be made by the employer and are linked to the profit sharing plan. While this is an available option in some companies, most 401k plans are participant-directed.

Most 401k plans will allow the employee to make investment decisions. They will be able to choose where the money is invested. The choices include stocks, mutual funds and bonds. It is possible to invest in a combination of all three. Other investment choices could include investing in your company and owning some of the company stock.

All retirement plans, including 401k plans, are regulated by The Employment Benefits Security Administration, which is part of the Department of Labor. Individuals who work for the state government will not have the option of a 401k. They have other types of retirement plans that are available. Other companies that are tax exempt or private may offer a 401k plan, as long as qualifications are met.

More 401k Plan Facts

There are many benefits of a 401k. First and foremost is the control that the employee has. They can choose how much they wish to contribute and exactly how the money is to be invested. Changes can be made at any time. If you do not like your current investment choices, you can choose to invest in other companies, funds or bonds. You can also adjust your contributions by notifying your employer.

Funds may be withdrawn from a 401k plan, but this is not advised until you reach retirement age. If you do withdraw early, you will have to pay taxes on the entire amount in the account and you will also incur a penalty for removing the money early. However, there is an option that allows for withdrawals due to hardships. In this case, you may not have to pay the penalty.

401k plans do have rollover options. Before making the choice to use 401k plan rollovers to IRA, make sure to do the required research so you know exactly what will be happening to your savings. 401k plans are designed to help you save for retirement. It is always best to leave the money in the plan for as long as possible, especially if you are working for a company that will match your contribution.

About the Author:

Best IRA Rescue provides services on your IRA investments and traditional IRA and will help you reduce your inherited and beneficiary independent retirement account taxes in your estate assets. Roth on ROIDS is your advanced Roth IRA retirement planning strategy and one of the best IRA tax-savings strategies with benefits of a guaranteed death benefit, guaranteed principal, tax-free growth, and tax-free distributions from policy loans.
Contact us if you have any questions on your IRA retirement planning. Roth IRA-Best IRA 401k CODA-Cash / Deferred Arrangement
Boston, MA: 71 Commercial Street #150 Boston, MA 02109
California: 543 Victoria Ste. J, Costa Mesa, CA 92627
toll-free: 888-93ULTRA (888-938-5872)
tel: +1.508.429.0011
fax: +1.508.429.3034

Source – 401k CODA-Cash or Deferred Arrangement Plan, 401k Plan Facts

Roth IRA or Traditional IRA: How To Choose?

traditional ira contribution rules

Question: Why is there an upper income limit for contributing to a Roth IRA?

People over a certain income are not allowed to make any contributions to a Roth IRA. Why? Wouldn’t people with high income rather pay the taxes later anyway (as they would do with a traditional IRA)? In other words, doesn’t this rule just prohibit people from doing something they’d already rather not do?
Mrs. F: in addition to the upper income limit, there’s also a yearly contribution limit ($4000 this year). But Roth IRAs are still very, very, worth it! You can always put more money in next year, and the year after that, etc. Contribute the maximum, or as much as you can, every year; you’ll be glad later.

Answer: The limits are for AGI over $160,000 if married (MFJ) and $100,000 for single folks. I would assume that the idea of having a limit is to give tax breaks to lower income folks and continue to tax the "rich". All of this a political decision by Congress not the IRS.

IRA Investing