It’s logical to assume that making a contribution to an IRA account means you’re automatically investing for the future. But there’s a little quirk that could make a huge difference to the millions of people who are rushing to make contributions before the tax filing deadline: If you don’t specify what you want to happen…
Dear MarketWatch, I make over $100,000 a year, and expect to for the foreseeable future. As of now, I am contributing 8% of my income to my 403(b) with a 3% 401(a) match; all Roth. It would be more, but I am maxing out a Roth IRA and an HSA as well each year. I…
I recently made a panic decision to withdraw all my money from one retirement account and I am now closing on a house in February (about $200,000). I am 36 years old, married and have a 1-year-old. Half of me is regretting it, and I’m worried about next year’s taxes due to the withdrawal and…
Dear Quentin, Over the last couple years I dug myself out of the paycheck-to-paycheck cycle, and I am making good money. I never learned about stocks, investing, etc. I do not have a 401(k) at work. My lawyer uncle advised me to open a self managed Vanguard account with four different levels of stocks. I…
If you really want to rev up your retirement savings and minimize income taxes, the best thing to be is a late-career professional in private practice. When you’re making a lot of money and are close to retirement age, you have savings options that go way beyond the levels of the typical workplace 401(k) plan….
If you are a middle-income earner, you may be in a much better position tax-wise than you realize. That’s good news: You may be able to take advantage of that better position to strengthen your retirement income plan years into the future. With a simple change in the structure of your retirement accounts, you can…
Older retirement savers eager to stuff as much as possible into their accounts will benefit from the omnibus spending bill that’s expected to make it through Congress this week. But there are quite a few caveats when it comes to the new rules for catch-up contributions, which are the extra amounts the IRS allows you…
This article is reprinted by permission from NerdWallet. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. With the holidays right around the corner, taxes might be the last…
What’s the best strategy if I plan to use my RMD for charitable contributions? Dear James, You asked just in time! You have until Dec. 31 to make a qualified charitable distribution (QCD) from your IRA or other tax-deferred retirement plan and have it count toward your required minimum distribution (RMD) for 2022. This is…
My mom passed away, and left me her house, which I just sold and will net $250,000. I’m 41 years old with no real retirement savings. I make $80,000 a year, and I am maxing out contributions to my employer-matching retirement account. I own my car, pay off my credit cards in full every month,…
It’s the most wonderful time of the year for holiday cheer – and last-minute tax tips. Retirement Tip of the Week: As we approach the new year, look for tax-advantageous strategies to cut your tax bill next year, or at least save you money in the long run. Tax planning can be arduous, but so…
I am retired with Social Security and a state pension. Over the last 30 years I’ve accumulated a lot of “junk” from eBay EBAY. Now, I’m also trying to clean out my house, and sell it at cost or a small profit. With eBay now sending out 1099s, I believe I have to pay taxes…
This article is reprinted by permission from NerdWallet. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Whether your student loans are being forgiven, you received a gift…
People can contribute up to $22,500 in 401(k) accounts and $6,500 in IRAs in 2023, the IRS said Friday. For 401(k)s, that’s an almost 10% increase from 2022’s contribution limit of $20,500. For IRAs, it’s a more than 8% rise from 2022’s limit of $6,000. As added context, the inflation-indexed bumps tax year 2023 income…
This is Part Two of our list of suggested year-end strategies. Part 1 discusses gaming the federal standard deduction, and managing capital gains and losses. The tax environment is getting friendlier for workers. With year-end rapidly approaching, it’s time to consider moves that will lower your 2022 tax bill and hopefully position you for tax…
For job jumpers, the excitement of a new position and higher salary may be a lure to change companies, but it’s important to remember the 401(k) you have built at the company you’re leaving behind. The short tenure rate—which measures the fraction of positions that end after being held for less than a year—started rising…
I currently owe $300,000 on my house with a 2.5%, 30-year mortgage. I am maxing out my retirement accounts — IRA and 401(k) — and looking to retire in less than 10 years. I will receive an inheritance of at least $300,000, so I will be able to pay off the house. I’m in a…
Inherited IRAs are a gift to beneficiaries, but the rules surrounding distributions from these accounts are not. Beneficiaries must follow a 10-year rule for distributions, which began after the Secure Act passed in December 2019, but the requirements are intricate and, for some, tricky. The Internal Revenue Service issued proposed regulations about the matter, which…
In his classic tune “Roll Over Beethoven,” Chuck Berry famously belted: “Roll it over then move on up.” Well, if you’ve saved for years in a 401(k) plan, you’ll want to know how — or whether — to roll it over to move on up when you retire. My “Friends Talk Money” podcast co-hosts Terry Savage, Pam…
If you’ve left your job, doing an IRA rollover of the balance in your company retirement plan is usually a tax-smart move. A rollover allows you to continue to defer taxes on the amount you roll over. But our beloved Congress laid some federal income tax traps for the unwary. Don’t be among the unwary….