Another type of IRA is the Roth IRA, which is one of the best tax-free opportunities available.
The beauty of the Roth IRA for her is the flexibility it gives on withdrawals.
Thanks to these conversions, your Roth IRA should steadily grow, while your tax-deferred accounts shrink.
Example: If you are eligible to convert your IRA into a Roth IRA, should you?
Does this mean you should always reduce your 401(k) contributions to contribute to a Roth IRA?
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Teenagers can contribute to a Roth IRA to the extent they have earned income.
But a Roth IRA makes a great emergency fund (remember liquidity), says Rockville Centre, N.
For those who are making Roth IRA conversions, filing for an extension can juice returns.
For help deciding if a Roth IRA conversion strategy fits your needs, click here.
Better yet, she could let the Roth IRA grow, tax free, until Social Security time or beyond.
However, the earnings you accumulate in a Roth IRA are not taxed when used for retirement income.
If the Roth IRA loses money over its life, the Roth conversion is unlikely to be beneficial.
As you probably know, your ability to contribute to a Roth IRA is subject to income limitations.
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By contrast, money you stash annually in a Roth IRA, while taxed initially, can ultimately be withdrawn tax-free.
This total would include the sum balances of a traditional IRA, Roth IRA, 401(k) and defined contribution plans.
A. A traditional IRA is a joint retirement account and a ROTH IRA is an individual retirement account.
You also can put some of your savings into a Roth IRA, where the money will grow tax-free.
The in-plan conversion move can complement converting an IRA into a Roth IRA, or can be done instead.
After you pay conversion taxes at 2012 rates, growth in your Roth IRA will be tax-free for life.
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Earnings on Roth IRA assets are tax-free if qualified, and there is no required minimum distribution (RMD) amounts.
Another Roth IRA plus: There is no mandatory withdrawal age, which makes it a nice little wealth preservation vehicle.
What if they want to leave a tax-free legacy to their kids, in the form of a Roth IRA?
In this case, Lee would recommend a Roth IRA, which has very different tax consequences than the trusty 401(k).
For help deciding whether a Roth IRA conversion makes sense, click here.
It turns out all the hoopla about Roth IRA conversions isn't just talk.
In 2010, there is no income limit to convert from a traditional IRA to a Roth IRA, Lowlicht says.
Consider converting some of your Traditional IRA assets to a Roth IRA if you are eligible to do so.
Another benefit of a Roth IRA is that contributions can continue as long as the person is still earning income.
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So last year Dr. Tooth did the first of what Keebler expects to be a series of Roth ira conversions.
In an IRA or Roth IRA, when income is produced, there is no tax impact, as all tax is deferred.
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