Questions tagged [roth-ira]

To be used for questions related to Retirement Tax saving scheme Roth IRA as applicable in the United States

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35 votes
4 answers
3k views

Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA?

I recently started a new job and have a 401k from my previous employer that I don't know what to do with. Should I roll it into my new employer's 401k, a traditional IRA or a Roth IRA?
jamesaharvey's user avatar
67 votes
3 answers
14k views

Saving for retirement: How much is enough?

How to save I'm in my late twenties and am trying to get started off on the right foot saving for retirement. I have learned that retirement savings should usually be placed in retirement accounts in ...
Stainsor's user avatar
  • 3,397
5 votes
1 answer
535 views

Tax on money withdrawn from Roth 401(k) and Roth IRA when living outside the United States and over 59.5-year-old

I am over 59.5 year-old and live in the United States. I contributed to Roth 401(k) as well as Roth IRA. Money withdrawn from Roth 401(k) or Roth IRA is not taxed in the United States as I am over 59....
Franck Dernoncourt's user avatar
13 votes
2 answers
2k views

Penalty to withdraw from a new Roth IRA for first time home buyers?

My wife & I are 28 and plan on purchasing our first home in the next 1-3 years. Right now our assets are in two places: 403-b that I will not touch for the next 30+ years FDIC-insured savings ...
Pete's user avatar
  • 653
14 votes
1 answer
5k views

Can I withdraw Roth 401k contributions penalty-free before age 59.5?

I know that with a Roth IRA, contributions can be withdrawn penalty-free at any time. If I rollover a Roth 401k into a Roth IRA, can I do the same with the contributions made to the Roth 401k? I've ...
Andrew Coleson's user avatar
31 votes
1 answer
1k views

What are the differences between a "traditional" IRA and a Roth IRA?

I hear that a traditional IRA offers a tax deduction whereas a Roth IRA doesn't, but there's got to be more to it than that: What makes a Roth IRA any good, if it doesn't provide a tax deduction? ...
user avatar
10 votes
1 answer
611 views

Convert Traditional IRA to Roth IRA when income limits are not satisfied by Roth IRA?

Our household MAGI (Modified Adjusted Gross Income) does not allow us to contribute the full amount to a Roth IRA for 2010. In that case is converting some part of Traditional IRA to Roth to complete ...
EndlessSpace's user avatar
  • 1,663
7 votes
4 answers
868 views

Advice on where to put money once I've hit the income limits on Roth IRA?

For the past few years I have been contributing to my company-sponsored 401k just enough to get all of their match, and contributing up-to-the-limit in a Roth IRA. I've now reached the income limits ...
matt b's user avatar
  • 385
51 votes
2 answers
12k views

Can I hire my kid and start a Roth IRA for him?

I own an LLC, of which I am currently the sole member. It's my main source of income. I am wondering if there is a reason why I could not do the following: Hire my child as a part-time employee of ...
painter48179's user avatar
  • 2,761
23 votes
7 answers
2k views

401(k) Contribution When Employer Has No Match?

Long time lurker, first time asker here. I've seen some similar questions to mine here, but nothing exactly in the same circumstance. I've seen almost near-consensus that the ordering for investing ...
bhamby's user avatar
  • 483
17 votes
6 answers
14k views

Why do some companies offer 401k retirement plans?

Why do companies offer 401k (or other) retirement plans? Let me elaborate this... I understand that it could be part of an employee's benefits and that a retirement plan option might increase the ...
Marsellus Wallace's user avatar
12 votes
3 answers
4k views

Who keeps track of my contributions to my Roth IRA?

Since withdrawals up to the amount you contributed in a Roth IRA are tax and penalty free, who keeps track of that amount? I've transferred my Roth IRA from one broker to another so the new broker ...
Michael Pryor's user avatar
8 votes
2 answers
4k views

Can Roth IRA first time home buyer withdrawals be made up?

If we were to withdraw the annual contributions from our Roth IRAs for the closing costs on a house (we have a 20% down payment, but only recently learned that that's almost $10,000 less than what you ...
Chris Pfohl's user avatar
5 votes
2 answers
4k views

How are employer matched contributions handled in rollover from Roth 401k to Roth IRA?

I recently asked this question: Can I do a Roth 401k rollover to Roth IRA and withdraw contributions I've made this year? In there, one of the answers pointed out that employer 401k contributions ...
Dave's user avatar
  • 441
14 votes
3 answers
3k views

Treat HSA as an IRA?

As I understand it, any funds remaining in a Health Savings Account can be withdrawn for any purpose at age 59 1/2 (subject to ordinary income tax), making an HSA essentially behave like an IRA. Is ...
Tony the Pony's user avatar
12 votes
2 answers
2k views

Roth IRA: Vanguard vs Free Advisor's Mutual Fund

Background: I recently turned 25 and became applicable to invest into my employer's 401K. Due to no matching, I have 3% allocated in as a supplemental retirement fund. Currently single, rent (no ...
Xrylite's user avatar
  • 322
8 votes
1 answer
3k views

First time home buyer: Can you withdraw funds from a Roth 401k for a first time home purchase?

I have a Roth 401k. Soon I will have enough debts paid off that I would like to start building up a down payment for a house. The house purchase will be my first, and will be over a year from now. (...
Stainsor's user avatar
  • 3,397
8 votes
3 answers
649 views

How safe will Roth IRAs/401(k)s be going forward re: US's deteriorating fiscal position?

I've on and off wondered how "safe" Roth accounts are and things like this anti-Roth screed in the LATimes and this blog post at the Atlantic talking about the sad fiscal shape of the US has me ...
QuantumMechanic's user avatar
8 votes
3 answers
575 views

Should I keep my emergency fund in a Roth IRA

I have been thinking about putting my emergency fund into a Roth IRA (in an FDIC insured High Yield Savings Account, so liquidity isn't an issue). My reasoning is as follows: I can always withdraw my ...
lzam's user avatar
  • 611
7 votes
2 answers
480 views

Any Downside to Backdoor Roth?

Regardless of income, is there any reason not to do a back-door Roth if you can afford it? Since you are paying tax on that income used for the contribution either way, it seems that there is only ...
Phil Sandler's user avatar
  • 3,501
7 votes
2 answers
1k views

What are the disadvantages of a backdoor versus conventional Roth IRA contribution?

My income is close to the Roth IRA limit. I like to do my IRA contributions early in the year, before I know exactly how much I will make due to bonuses and such. So I am thinking about doing a ...
Craig W's user avatar
  • 15.8k
6 votes
2 answers
1k views

Are 401(k) contribution limits for employee & employer separate? What about hitting the limit?

I am 29 years old and have a 401(k) already with my company. I just started contributing 10% to my 401(k), up from my 8%. My company does not match but they do put 10% of my salary into my 401(k) as ...
NOVA703's user avatar
  • 101
6 votes
2 answers
804 views

Can you use external money to pay trading commissions in tax-free and tax-deferred accounts?

I contribute the max to my Roth IRA every year ($5500 in 2013, for example). However, let's say I use that money to buy two stocks, with a commission $10 each, so I am effectively only contributing $...
Craig W's user avatar
  • 15.8k
6 votes
2 answers
584 views

Roth IRA excess contribution removal infinite loop?

I'm dealing with correcting an overcontribution to a Roth IRA due to income limits, and my head hurts. Here's the gist of my problem. I contributed $5500 to my Roth in 2016. In March 2017, I went to ...
aggieTaxes's user avatar
5 votes
1 answer
368 views

Any advantage to non-deductible Traditional IRA contibutions?

The typical comparison between Traditional and Roth IRAs goes roughly as follows: A traditional IRA allows you to invest pre-tax money into the account and it grows tax free. Once you withdraw the ...
Jimmy's user avatar
  • 600
5 votes
2 answers
2k views

Use Roth IRA to pay portion of federal student loans?

I'm a graduating medical student, and have ~$220,000 in student loans. The majority of this (~$180,000) is in federal student loans at 6.8%, with the rest being at a lower rate (4-5%). I also have ~$...
Austin P's user avatar
5 votes
4 answers
1k views

Senior in College, need advice on my investing plan

I am a rising senior in college and saved up $3,000 dollars from my summer internship. I have done a lot of research online about investment options for my age and I decided that opening a Roth IRA ...
user2510809's user avatar
4 votes
1 answer
593 views

Where to enter earnings income when correcting excess Roth IRA contributions?

I'm correcting excess contributions to a Roth IRA for TY 2019. I understand that the earnings will be taxed in TY 2019 as well, even though they are being returned to me in 2020. Where do I capture ...
Andy's user avatar
  • 1,067
4 votes
1 answer
205 views

403(b) and ROTH IRA contribution and rollover

My current employee offers a 403(b) with a Roth option. I also have a Roth IRA. The Roth IRA has a lower annual contribution limit than the 403(b). I have some questions regarding contributions. ...
Russell's user avatar
  • 151
4 votes
2 answers
449 views

How should I deal with over-contributing to a Roth IRA?

While doing my taxes, I came to the realization that my income for 2015 is above the limit to contribute the full $5500 to my Roth IRA, but below the limit where I am unable to contribute. My ...
SethMMorton's user avatar
3 votes
2 answers
466 views

Roth-IRA withdrawal penalty: 10% of what?

Early non-exempt withdrawal from a Roth-IRA results in a "10% penalty". A 10% penalty on what amount: The amount withdrawn? The remaining balance of the Roth IRA? Both? Insight appreciated
CQM's user avatar
  • 20.2k
3 votes
5 answers
920 views

Is a Roth IRA preferable to a Traditional IRA?

With a traditional IRA, you are taxed on the complete balance of your account when you cash out after retirement correct? This would mean you are taxed on contributions + interest earned. With a ...
Adam Johns's user avatar
3 votes
2 answers
1k views

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw my contributions tax-free and penalty-free?

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw one's contributions (that were initially made to the after-tax 401(k)) tax-free and penalty-free? Background ...
Franck Dernoncourt's user avatar
3 votes
1 answer
234 views

Roth IRA Conversion vs Recharacterization

Despite trying to hit the nail on the head, I managed to put more into my Traditional IRA for 2018 than I will be able to deduct due to Traditional IRA phaseout limits. The last thing I want is to ...
Andy's user avatar
  • 1,448
2 votes
1 answer
184 views

In the US, if I am afraid my income may be over $153,000 for Roth IRA, is it true I can do the IRA backdoor?

I saw on the Robinhood website that they do IRA and Roth IRA now, and they have a 1% matching, but it says for the Roth IRA qualification for year 2023: Anyone with a MAGI (modified adjusted gross ...
Stefanie Gauss's user avatar
2 votes
1 answer
2k views

What does Line 22 Basis in Roth IRA contributions mean in Form 8606?

What does Line 22 Basis in Roth IRA contributions mean in Form 8606? If I an correct, in traditional IRA, the basis, as in 8606, is the portion of the balance due to nondeductible contribution. Is ...
Tim's user avatar
  • 5,883
2 votes
2 answers
1k views

Why would an employer not allow their employees to perform a "mega Roth IRA backdoor" (i.e., convert from an after-tax 401(k) to a Roth IRA)?

My employer offers a 401(k) plan through Vanguard to its employees. There exist two types of Roth IRA Rollover: Convert from a non-deductible traditional IRA to a Roth IRA (a.k.a., "Roth IRA ...
Franck Dernoncourt's user avatar
1 vote
2 answers
258 views

Evaluatiing whether it a smart idea to convert 401K's and traditional IRA's to Roth IRA's?

Recently an investment adviser was providing free consultations at my wife's workplace. He advised us to convert some 401K's from previous employers and traditional IRA's to Roth IRA's. He did this ...
GreenMatt's user avatar
  • 424
-1 votes
2 answers
325 views

Emptying a Roth IRA account

If I withdraw money from my single Roth IRA account to make it empty, will the account be closed? Is there any expense to open a new Roth IRA account? If my purpose of emptying my Roth IRA account is ...
Tim's user avatar
  • 5,883
21 votes
1 answer
3k views

How to invest after 401k and Roth IRA are maxed?

I'm in my 20's. I'm a big saver and I think I've covered the basics, including: Paying off all high interest (>3%) debt. Getting the full company match out of my 401k. Maxing out my Roth IRA for the ...
James Jones's user avatar
16 votes
2 answers
667 views

Pros, cons, & differences in investing in 401k vs. IRA?

What are some of the pros, cons, and differences of investing in a 401k vs. investing in an IRA (either Roth IRA or regular)?
GSto's user avatar
  • 395
14 votes
3 answers
895 views

Should I "hedge" my IRA portfolio with a life cycle / target date mutual fund?

I'm fully contributing to my Roth IRA every year into a brokerage account that is 100% in mutual funds. I've done basic mutual fund research and picked about 5 different funds that match what would ...
Mike's user avatar
  • 926
14 votes
3 answers
24k views

Should I open a Roth IRA or invest in the S&P 500?

I am a 24 year old high school teacher. Currently, I don't have that much capital to open two accounts. I would rather focus on one at a time until I gain more capital. Should I start with a Roth IRA ...
YungAznBeast's user avatar
13 votes
1 answer
7k views

Should I use a Roth 401K rather than 529 to save for children's college?

I have set up a 529 for my child's college fund but the more I look at it the less useful it seems compared to alternatives. The 529 is quite restricted -- What if she doesn't go to college? What if ...
Matthew's user avatar
  • 3,128
13 votes
3 answers
1k views

Can I withdraw from my Roth IRA retirement account to fund a startup?

I'm 24 years old and have $10k in my retirement accounts (Roth IRA) after about a year with a real job. I'm considering withdrawing the entire balance to support myself for a few months while I ...
user avatar
13 votes
2 answers
1k views

Do Roth IRA contribution limits apply to Rollover IRAs?

My wife has already maxed out a Roth IRA for 2010. She just quit her job, and has a 401k from her former employer. Would I be able to roll it into a new Roth IRA even though she has already ...
jjeaton's user avatar
  • 379
12 votes
2 answers
1k views

Can you have a Roth IRA and a traditional IRA? What about two separate IRA accounts of the same type?

I'm interested in starting a new brokerage account somewhere. I would like to "test the waters" before transferring my entire IRA to them. Is there any law against having a completely separate IRA ...
Benjamin's user avatar
  • 829
12 votes
4 answers
1k views

Reached the AGI for Roth IRA - now what?

For the past seven years, I've been contributing to my Roth IRA the max yearly amount. However, this year, my AGI will be above the maximum allowed amount. Couple questions... 1) Am I able to ...
user avatar
11 votes
5 answers
23k views

What is the difference between a Rollover IRA and a Roth IRA?

Previous Question. I have decided to roll my 401(k) into a Roth IRA. I use ThinkOrSwim as my broker currently, so I plan on opening an IRA with them. When opening the account I'm presented with the ...
Kyle Trauberman's user avatar
10 votes
1 answer
3k views

Can I use my Roth IRA to start a business?

I've recently been reading up on Roth IRA to Self-Directed IRA plans. And I've seen a few places that mention their use as a seed-fund to start your own business.. Where can I find the parts of the ...
Evan Carroll's user avatar