Five Steps in Planning for Multiple Beneficiaries
Let’s look at a situation where more than one beneficiary is selected for an IRA. When do multiple beneficiaries exist? Multiple beneficiaries exist when an individual names more than one beneficiary for their IRA. When should you name more than one beneficiary? When you want your IRA assets to go to more than one person […]
Back-To-School: Roth IRAs vs. 529 Plans
Back-to-school season is upon us, which serves as a great reminder to consider how you can help your children or grandchildren fund their higher education. There are two popular options: a 529 plan or a Roth IRA. 529 plans are a well-known option designed specifically for this purpose. Distributions from a 529 plan can be […]
Leaving a Legacy: 3 Differences Between Life Insurance and Roth IRAs
Roth IRAs are always included in your estate. Thanks to the current $13.61 million federal exemption amount — the amount that can pass estate tax-free to beneficiaries — estate tax concerns are nowhere near what they used to be. The overwhelming majority of Americans will not owe any federal estate tax when they die. Still, […]
Using IRAs to Help Children in 5 Easy Steps
Can children have IRAs? There is no minimum age for having an IRA. Due to the power of compound interest, saving tax-free in an IRA from childhood can provide a significant head start on financial security. Saving $7,000 in an IRA annually from age 14 through 24 and earning 7% per year provides over $1 […]
Five Things to Know About ROTH 401(k)s
Did you know that a recent survey found that over 80% of 401(k) plans now offer employees the option of making Roth 401(k) employee contributions? More and more employees are now taking advantage of that opportunity. (In this article, I use the term “Roth 401(k) contributions” to also include Roth employees made to 403(b) and […]
Don’t Forget Your Beneficiary Form!
Here’s a scenario. You have been contributing to your IRA for years. The market is up, and you are watching those investments grow. Maybe you have rolled over funds to your IRA from your company plan. You may now have a significant balance. So far, you have taken smart steps toward a secure future. Don’t […]
Contributing to a Health Savings Account (HSA) in 5 Easy Steps
What is an HSA? An HSA is a tax-advantaged medical savings account that can be used tax-free for qualified medical expenses. HSAs are designed to be used in conjunction with a High Deductible Health Plan (HDHP). HSAs offer triple tax advantages: contributions are deductible, earnings are tax-deferred while in the HSA, and distributions are tax-free […]
Fixing Missed 60-Day Rollover Deadlines with Self-Certification
If I miss the 60-day deadline for completing an IRA rollover, is there any way to save the rollover amount from tax? Failing to complete a 60-day rollover on time can cause the rollover amount to be taxed as income and perhaps subject to a 10% early withdrawal penalty. However, the deadline may have been […]
Avoiding Non-Spouse Beneficiary Mistakes
How can I avoid making costly mistakes when I inherit an IRA from a person who was not my spouse? Inheriting an IRA can be a financial windfall, but it’s important to understand the complex, specific rules that apply to non-spouse IRA beneficiaries to avoid critical errors. At first, don’t do anything! Especially, don’t take […]
