IRAs

In many circumstances, a Roth IRA is a better option than a 401(k) retirement plan because it provides a more flexible investment vehicle with more tax advantages—especially if you expect to be in a higher tax band in the future. A 401(k) is hard to beat if your income is too high to contribute to […]

A Simplified Employee Pension (SEP) plan, often known as a 408(k) account, is an employer-sponsored retirement savings plan. The SEP equivalent of the popular 401(k) plan is the 408(k). Smaller businesses, such as those with fewer than 25 employees, are eligible for a SEP. Employee contributions are not permitted in the SEP-IRA, which permits only

A backdoor Roth IRA is essentially some clever administrative work: you contribute to a standard IRA, convert your contributions to a Roth IRA, pay taxes, and you’re done. Even if you didn’t qualify for a Roth, you can still contribute through the back door, regardless of your income. What is the advantage of a back

Even if your salary is too high for a Roth IRA, a backdoor Roth IRA allows you to convert a traditional IRA to a Roth. Simply put, you contribute to a regular IRA, convert the funds to a Roth IRA, pay taxes, and you’re done. Is backdoor Roth still allowed in 2021? People can save

You can’t contribute more than the lesser of the following amounts to each employee’s SEP-IRA each year: $61,000 in 2022 ($58,000 in 2021; $57,000 in 2020; and later years subject to annual cost-of-living increases). These limits apply to all defined contribution plans, including SEPs, that you design for your employees. Employee compensation of up to

A beneficiary is any individual or entity designated by the account owner to receive the benefits of a retirement account or an IRA after he or she passes away. Any taxable distributions received from a retirement account or traditional IRA must be included in the beneficiary’s gross income. What is the difference between an inherited

Contributing to a Roth IRA can help you save for retirement, but you should avoid contributing too much. If your income increased unexpectedly, you may have contributed too much to your Roth IRA, making you ineligible for the full contribution. You can recharacterize, withdraw, or apply your overcontribution to a future year. How do I

A traditional IRA, also known as a contributing individual retirement arrangement, is an investment account specifically created for retirement savings. Contributory IRAs are appealing because of the tax advantages they provide, both at the time of deposit and during the account’s existence. Contributions and withdrawals are both subject to restrictions. What is the difference between

The backdoor approach allows high-earners to avoid Roth IRA contribution limits. If you don’t have any traditional IRA balances that need to be considered into your tax bill, or if your employer’s qualifying plan allows rollovers of deductible IRA balances, you’ll save the most. What happens if you make more than Roth IRA limit? If

A Custodial IRA is an Individual Retirement Account held for a minor with earned income by a custodian (usually a parent). Once the Custodial IRA is established, the custodian manages all assets until the kid reaches the age of 18. (or 21 in some states). All funds in the account are owned by the child,