A Roth IRA is attractive to many people because you contribute after-tax dollars and the earnings grow tax-free—when you withdraw funds in retirement you pay no income tax on your withdrawals. But the IRS is not so eager to lose too much tax money, so they have put restrictions on who can contribute to a Roth IRA. Unless, that is, you employ a strategy known as the Backdoor Roth.
Anyone can convert a traditional IRA to a Roth IRA in 2020. There are no income limits or restrictions based on your tax filing status. You generally have to include the amount you convert in your gross income for the year of conversion, but any nondeductible contributions you’ve made to your traditional IRA won’t be taxed when you convert.
On Wednesday, July 8, HBKS Wealth Advisors hosted a webinar addressing three fundamentals of financial planning: personal financial management, retirement planning, and insurance planning.
Roth IRAs can be a beneficial retirement planning option, but not understanding them could lead to mistakes and potentially costly penalties.
Higher-income earners are eventually phased out of qualifying to contribute to a Roth IRA. But there is a workaround for those folks—namely, a Roth conversion.
The pandemic has reiterated the strategic importance of advanced comprehensive planning. Many folks are aware of the need but are uncertain on how to start the process.
In just a couple of months since the first reported case of COVID-19 in the U.S. life has changed dramatically for most of us. No one planned or prepared for a pandemic—and it’s almost impossible to predict what the long-term implications will be. So many questions and no answers. It can be overwhelming. But life goes on, and you still have control over most of yours.
The late ’90s was a stressful time in the retirement plan world. How could this huge boomer population prepare for retirement a decade away when less than half were covered by a retirement plan at work. And with IRA annual contribution limits of $2,000—an additional $250 for a non-working spouse—it would be virtually impossible to save enough to retire.
An FHA-insured reverse or conversion mortgage works by allowing homeowners age 62 and older to borrow on their home’s equity without having to make monthly mortgage payments. As the borrower, you can take funds in a lump sum, line of credit or via structured monthly payments. Nearly 70 percent of all home equity conversion mortgages (HECMs) are designed to eliminate mortgage payments.
Congress has passed and the president signed into law a bill that will change not only how you save for retirement, but how you’ll retrieve your savings. Among its provisions, the SECURE Act includes new rules that substantially impact those who inherit retirement funds in the form of qualified plans like IRAs, rules that require you as a plan owner to re-think how you will pass along the wealth in those plans to your heirs.
There are only so many pre-tax avenues to retirement income. High earners who want to put more dollars aside must find alternatives beyond such traditional means as 401ks and IRAs.
We have seen market downturns several times in history and what we have learned is the “next right thing” has been to stay calm. Now is not the time to make big changes to your portfolio.
The last few months have inundated us with programs and legislation designed to help us regain our financial stability. One of the attempts to help, the CARES Act, similar to what was done in 2010 following the Great Recession, allows retirees subject to required minimum distributions (RMDs) from their IRAs to skip those distributions in 2020.
While there is no law requiring a president or a candidate for the presidency to release their returns, President Biden has released 22 years of his returns dating back to 1998, giving me my long-awaited opportunity to make observations about a U.S. President’s returns and what we might learn from them.