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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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
63 votes
11 answers
35k views

I'm 18 and have 6 grand. What should I do with it?

I'm 18 and about to go to college. Luckily, I don't have to worry about student loans or most other living expenses. I've been working and have over $6,000 (will probably be about $7,000 by the end of ...
Emily Harms's user avatar
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
36 votes
5 answers
13k views

IRS sent me a letter...I messed up by unwittingly taking money out of a Roth IRA and reporting it incorrectly

I recently received a letter from the IRS based on my taxes for 2015. I believe I did not understand the proper workings of a Roth IRA. I was under the impression I could pull my money out and only ...
JonH's user avatar
  • 1,395
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
33 votes
5 answers
9k views

Why is half of your IRA Required Minimum Distribution forfeited if you do not make minumum withdrawals by 70.5 years of age?

I do not understand this rule: "IRA confiscates half of your account if you do not make your withdrawals by 70.5 years of age". Why? What does it mean to make withdrawals? Just to request your money ...
YohanRoth's user avatar
  • 693
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
30 votes
6 answers
5k views

Is a Roth IRA good for a high schooler?

I am a high-school Senior who will not earn enough income working this summer to have to pay income taxes. I have a full ride to college, so I was thinking of using my earnings/savings for retirement. ...
maxbear123's user avatar
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
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
18 votes
3 answers
2k views

Should I pay off my student loan before putting money into Roth IRA?

I have about $7K in student loans remaining at 6.25% I also haven't made a contribution to my Roth IRA for 2010. I'm thinking off paying off my loan at the end of the year, but that'll not really ...
Mike Sherov's user avatar
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
17 votes
5 answers
8k views

My company is suspending its 401K match; what is the best thing to do with my money?

I am a 25 y/o US citizen working in the US for a US company. Given these days' hard times, my company has elected to suspend its 401k match. I make too much money to contribute to a Roth IRA. What is ...
Runeaway3's user avatar
  • 2,888
17 votes
4 answers
11k views

Why are there income limits for Roth IRAs?

Why does the IRS establish a Modified AGI limit for contributions to Roth IRA accounts? I can understand having a limit for Traditional IRA accounts because the government doesn't want to lose out on ...
Daniel's user avatar
  • 5,330
17 votes
1 answer
5k views

I withdrew contributions from a Roth IRA. Why is my tax service imposing a 10% penalty? I am only withdrawing contributions, not earned income

I received a Form 1099-R from my brokerage with box 7 (Distribution code) marked with Code J indicating that I will be paying a 10% penalty for withdrawing the money. From my understanding, I'm able ...
largecoconutballs06'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
15 votes
1 answer
2k views

Are Roth IRA dividends taxable?

Are dividends from a 5+ year old established Roth IRA for a person over 70 1/2 tax free? I understand withdrawals of principal are tax free as they have already been taxed.
Jim Hudson's user avatar
15 votes
1 answer
1k views

What are the appropriate forms to file when using a mega-backdoor?

For the backdoor (IRA -> Roth IRA, generally up to $5500 per year) conversion, we need to file Form 8606. Are there any equivalent forms that must be filed for mega-backdoor (After-tax 401k -> Roth ...
arcyqwerty's user avatar
  • 1,271
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
14 votes
1 answer
2k views

Did I make Roth IRA contribution after the deadline?

I opened my Roth IRA account following the Wealthfront recommendation on July 5, 2017 and contributed $5500. I am new to Roth IRA at that time. However, today (Jan 3, 2018) I just know there is a ...
Hongbo Miao's user avatar
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
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
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
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
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
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
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
12 votes
5 answers
8k views

When do you actually pay taxes on Roth IRA contributions?

I'm in my mid 20s and opened up my first retirement savings this year, in the form of a private Roth IRA (having nothing to do with an employer or paychecks). From the research I did beforehand, I ...
WakeDemons3'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
12 votes
3 answers
3k views

18 year old making $60k a year; how should I invest? Traditional or Roth IRA?

I've had a lot of questions regarding personal finance, and I figured this would be the best place to get some good answers. To start, I made over $60,000 in 2013 and just over $44,000 in 2012. I make ...
Paul's user avatar
  • 121
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
12 votes
1 answer
972 views

How to claim a minor's income?

When a child earns money babysitting or doing yardwork for neighbors, it's common to ignore claiming the income, as income earned by the minor has its own deduction, and would likely not generate any ...
JTP - Apologise to Monica's user avatar
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
9 answers
4k views

Roth vs Traditional Investing assuming same tax bracket in retirement

I've done a little (simplified) math to determine the difference in investing in a Roth account and a Traditional retirement account. I'm assuming that I will be in the same tax bracket in retirement ...
Luke Willis's user avatar
11 votes
6 answers
4k views

How should I invest/spend this 50k inheritance?

I am 32 and work in the non-profit sector making 30k/yr. I own my home, which was recently appraised at 202k. I was given an inheritance of 50k from my grandmother. Based on my financials, how should ...
Elle's user avatar
  • 111
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
11 votes
3 answers
10k views

Did basically all mutual funds have a significant crash in 2008?

I am interested in starting a Roth sometime in the near future, but I'm worried about an economic downturn like 2008 eating up a lot of my savings at some point in my life. Did most mutual funds take ...
Adam Johns's user avatar
11 votes
1 answer
2k views

401(k) forfeited and check issued. What can I do to avoid penalty?

Recently, I checked the website of the last 401(k) plan that I contributed. I found that the account was "forfeited", which I assume it means that it was closed due to not being an employee of the ...
scubaFun's user avatar
  • 875
11 votes
1 answer
11k views

Is it possible to transfer stock I already own into my Roth IRA without having to sell the stock?

My cash is already in the stock. Can I just transfer the stock to my Roth IRA?
zundarz's user avatar
  • 1,182
11 votes
1 answer
8k views

If Roth IRAs are not reported on income tax returns, how does the IRS police them?

Directly from the IRS: Contributions not reported. You do not report Roth IRA contributions on your return. If that's the case, then how does the IRS make sure people don't exploit the system? ...
rinogo's user avatar
  • 295
10 votes
5 answers
1k views

Should I cash out my Roth IRA to pay my mother's property tax debt, to avoid foreclosure on her home?

I'm thinking about liquidating my Roth IRA and taking a loan out against my 401k to pay the property taxes my cancer stricken mom owes on her home. She's several years behind, and the county is ...
foreverBroke's user avatar
10 votes
3 answers
1k views

Should I put money in both a ROTH and Traditional IRA?

I'm 31. I put 11% of my $$ into a 401k. I put about $600 a month into a high interest savings account. I max out my ROTH IRA. I'm wondering if I should max out a traditional IRA as well or if ...
Jack's user avatar
  • 1,456
10 votes
2 answers
855 views

How do Roth IRAs compare to Traditional IRAs for college savings?

I have seen some web pages and blog posts about using a Roth IRA instead of a 529 savings account to save for college costs as a way to have more flexibility with the investment and its returns. With ...
MisterStrickland's user avatar
10 votes
2 answers
318 views

Deductions greater than Income : Traditional IRA to Roth Conversion?

Jurisdiction is US/Oregon I retired in 2014. In 2015 I am drawing on cash and investments held in a taxable account, and don't foresee needing to tap my IRAs for several years. Thus I am in the ...
Ex Umbris's user avatar
  • 518
10 votes
1 answer
6k views

Can I contribute to a 401k, Roth 401k and Roth IRA at the same time?

My company provides me access to 401k, and I am contributing the maximum allowed in that 401k. In addition I also have Roth IRA (I qualify for it because of income less than $193000). Recently, my ...
Carlos's user avatar
  • 101
10 votes
1 answer
528 views

How can I self report and undo Roth IRA contributions, due to exceeding the AGI limit?

Contributions for Roth IRAs can be made through April 15 of the following year. Without getting into philosophical arguments about dollar cost averaging, my general principle has been to put the money ...
Anonymous's user avatar
  • 101
10 votes
1 answer
2k views

If you're married, can you still file an income tax return as a single individual?

Roth IRA limits on income make it advantageous for my wife to file single. We are getting married this year in November. The IRS says that if you are married filing separately, that essentially she ...
Michael Pryor's user avatar
10 votes
1 answer
1k views

Why do Roth IRAs have income limits if you can just do a backdoor IRA contribution?

As we all know, Roth IRAs have income limits that prohibit individuals from contributing to a Roth IRA if their Modified Adjusted Gross Income is over a certain limit ($133,000 for individual ...
Byte Lab's user avatar
  • 251
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

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