Making last-minute IRA contributions might cost you a ‘procrastination penalty’

Making last-minute IRA contributions might cost you a ‘procrastination penalty’

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…

I ruined my family’s finances by withdrawing from my 401(k) to buy a house — and I regret it

I ruined my family’s finances by withdrawing from my 401(k) to buy a house — and I regret it

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…

‘I dug myself out of the paycheck-to-paycheck cycle’: Should I use my bonus to pay off my mortgage, put it in a savings account or Vanguard?

‘I dug myself out of the paycheck-to-paycheck cycle’: Should I use my bonus to pay off my mortgage, put it in a savings account or Vanguard?

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…

Opinion: Forget that $22,500 limit. Some workers can supersize their tax-deferred retirement savings up to $265,000 in 2023.

Opinion: Forget that $22,500 limit. Some workers can supersize their tax-deferred retirement savings up to $265,000 in 2023.

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….

With this simple year-end change to your retirement accounts, you can reap significant tax rewards

With this simple year-end change to your retirement accounts, you can reap significant tax rewards

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…

Opinion: New catch-up contribution limits could boost your 401(k) — if you can afford them

Opinion: New catch-up contribution limits could boost your 401(k) — if you can afford them

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…

There’s still time to make these smart tax moves before the end of the year—your future self will thank you

There’s still time to make these smart tax moves before the end of the year—your future self will thank 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…

Opinion: What’s the most tax-efficient way to use my RMD to make a charitable donation?

Opinion: What’s the most tax-efficient way to use my RMD to make a charitable donation?

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…

I sold my late mother’s home for $250,000. I make $80,000 and have $220,000 in student debt. I want to buy a house. Should I use all my inheritance for a down payment?

I sold my late mother’s home for $250,000. I make $80,000 and have $220,000 in student debt. I want to buy a house. Should I use all my inheritance for a down payment?

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,…

Dear Tax Guy: ‘I’ve accumulated a lot of junk.’ I plan to make $6,000 selling stuff on eBay. Can I put it into an IRA instead of paying income tax?

Dear Tax Guy: ‘I’ve accumulated a lot of junk.’ I plan to make $6,000 selling stuff on eBay. Can I put it into an IRA instead of paying income tax?

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…

Yes, you can invest as little as $100: Here are 4 ways to get started

Yes, you can invest as little as $100: Here are 4 ways to get started

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…

IRS sets new 401(k) limits — investors can save a lot more money in 2023

IRS sets new 401(k) limits — investors can save a lot more money in 2023

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…

Are you a ‘quick quitter’? Job-jumping may be sabotaging your retirement.

Are you a ‘quick quitter’? Job-jumping may be sabotaging your retirement.

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’m in a very lucky position’: I will receive a $300,000 inheritance. Should I pay off my mortgage or invest the money?

‘I’m in a very lucky position’: I will receive a $300,000 inheritance. Should I pay off my mortgage or invest the money?

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…

Confused about inherited IRA rules? Here’s what to know

Confused about inherited IRA rules? Here’s what to know

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…

Should you roll over your 401(k) to an IRA? Here are 3 tips for this key retirement decision.

Should you roll over your 401(k) to an IRA? Here are 3 tips for this key retirement decision.

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…