Roth IRA

The word is out that President Biden plans to give the federal tax on capital gains a makeover. But the results may not be so pretty for stock investors. It could mean a higher tax bill that could eat into an investor's gains accumulated in the stock market.  One of the best defenses against future tax liabilities is a tax-advantaged account like a Roth IRA (individual … [Read more...] about Biden’s Tax Plan Makes Roth IRA Retirement Savings Even More Attractive

The Saver's Credit in actionLet's say you're a single filer who earned $19,000 for the year. Most of your earnings consisted of brand ambassador work that was not taxed throughout the year so you're stuck with a $1,000 tax bill. Instead of worrying about how you're going to pay that off, the Saver's Credit could be added to your tax return to save the day.If you contribute … [Read more...] about Surprise! Your Roth IRA Savings Could Grant You a Tax Credit | Personal-finance

Two very important, and two very different questions. I raised them in my previous article “Begin Investing While Young.” It's online at  https://www.metrowestdailynews.com/story/business/2021/04/12/begin-investing-while-young/7113284002/ Let’s review as to the where to invest first, and leave the what for another time, too broad a subject for this space.  Besides, the where … [Read more...] about Where to invest, and in what to invest?

If you keep up with the news, you have probably read all about the proposed tax law changes that could come to fruition in the coming months. For example, the Biden administration just proposed nearly doubling the capital gains tax rate for the wealthy to a whopping 39.6% (and an even higher 56.7% in California when including their state taxes) — a move meant to collect more … [Read more...] about The Most Valuable Retirement Account?

getty This year and perhaps next could turn out to be the best time to convert a traditional IRA to a Roth IRA. Income tax rates are likely to increase in the coming years. This year’s tax rates could be the lowest for the rest of our lifetimes. Lifetime income taxes could be substantially lower if you pay taxes on today’s IRA balance at today’s tax rates instead of … [Read more...] about 7 Times When Converting To A Roth IRA Pays Off The Most

Q. I’m confused about the different tax treatments given the non-deductible traditional IRA versus the Roth IRA. Why isn’t a non-deductible traditional IRA treated the same way as a Roth IRA when withdrawals are made? With both IRAs there is no deduction, the earnings grow tax-free and no tax benefit when the contribution is made. Why are they different?— InvestorA. You’re … [Read more...] about How is the Roth IRA different from a non-deductible IRA?

Chip Somodevilla / Getty ImagesThere's certainly no shortage of advice about how to invest for a successful retirement. However, sometimes it can be hard to know who to believe. If you don't have a trusted fiduciary financial advisor, the next best place to get advice is from those who have become multimillionaires themselves.Discover: See the Full List of Money's Most … [Read more...] about Suze Orman, Warren Buffett and Other Money Experts Weigh In on How To Best Set Yourself Up for Retirement

Dear Liz: I read your useful summary of the advantages of Roth IRAs. I recently retired and decided to open a Roth (I know, pretty late) alongside my traditional IRA. I have an investment manager who will hopefully create some gains in that account. One thing that I learned is that I must wait five years before I can begin withdrawing earnings from the Roth tax-free. For this … [Read more...] about Liz Weston: Roth ‘5-year’ rule needs a careful look for older investors

So many Americans are pushed into 529 plans and told it's the only way to save for college. 529s are touted as tax-advantaged because the contributions to the plans are invested and grow in the accounts tax-free. If withdrawals are used for approved education costs, there aren't any taxes on the gains, as there would be with a mutual fund or brokerage account. But studies show … [Read more...] about Personal Finance: Are 529 Plans the Best Way to Save for College?

Dear Liz: Our 16-year-old daughter has been frugal since she started understanding money at about age 6. She works and makes a decent income for a high school student. Her savings are now quite substantial. She wants to open a Roth IRA while she is young and has no income tax liability. My wife and I have pensions and substantial savings but only one IRA. So we have no idea … [Read more...] about Does a teenager need a Roth IRA?