In this post, I'll cover my top three reasons to convert to a Roth IRA. Prior to the Tax Cuts and Jobs Act, recharacterization offered you the ability to undo the Roth conversion, making it like it never happened, The tax law eliminated that option. This has caused many to reconsider whether converting to a Roth IRA makes sense. However, if you make too much money to … [Read more...] about My Top Three Reasons to Do a Roth IRA Conversion
As we near the end of the year, I thought it would be a good idea to review the benefits of a backdoor Roth IRA. Many people have incomes too high to allow them to contribute to a traditional IRA with pre-tax money. Though income limits are higher for Roth IRA contributions, there is still a limit. The backdoor Roth IRA is a way to get around the income limits imposed by the … [Read more...] about Is the Backdoor Roth IRA Right for You?
There is a lot of confusion about what you can do with inherited IRAs. In today's post, I'll tell you what you need to know about inherited IRAs to make good decisions about them. There are required minimum distributions to consider. You also need to understand how to name your beneficiaries. There are special rules and exceptions for spouses, and many other things to … [Read more...] about What You Need to Know about Inherited IRAs
Beneficiary designations are something people often forget about when preparing for retirement. That can be a very costly mistake. This post offers 7 things you need to know. The bottom line: IRA beneficiaries matter - A LOT! In my financial planning practice, Leamnson Capital, I often review retirement account (IRAs, 401(k)s, etc.) beneficiary designations for the people I … [Read more...] about Naming IRA Beneficiaries – 7 Things You Need to Know
Roth Recharacterization rule Recently, I read the following announcement: IRS updates Roth recharacterization rule. In December, I wrote a post (link below) about a significant change to the rules for recharacterizing Roth IRAs conversions. The change basically took away the option. After researching the IRS update (and since I wrote about it), I wanted to bring … [Read more...] about IRS Updates Roth Recharacterization Rule
Do you own an IRA? Are you thinking about it? If so, which should you own - a Roth IRA or Traditional IRA? The answer for you may be both. There are benefits to each that we will explore in this post. This post will not include a discussion about investments in your IRA. I'll save that for another day., We will discuss in some detail how each IRA works. What are the … [Read more...] about Which Should You Own – a Roth IRA or Traditional IRA?
Since the penalties for not getting required minimum distributions (RMDs) right or severe, I thought it would be a good time to review the rules and deadlines to help you get it right. RMD rules are complicated and making mistakes by not following them are costly. If you miss taking an RMD or take out less than what is required, you will pay a 50% penalty. Yes, you read that … [Read more...] about Rules and Deadlines for Required Minimum Distributions (RMDs)
If you own or are thinking about starting a Roth IRA, you need to know that a major change is coming to Roth IRAs. Both the House and Senate proposals include this change. Let me start by saying that I am a raving fan of Roth IRAs. They have many advantages over traditional IRAs. If you have traditional IRAs or company retirement plans, once you reach age 70 1/2, the IRS … [Read more...] about IRS Brings Major Change to Roth IRAs with New Tax Law