We all know that one of the biggest considerations in an estate plan is avoiding taxes. Your estate assets at the time of death are potentially subject to estate taxes which is why any complete estate plan must look for ways to avoid taxation. One tool you may wish to include in your estate plan that can help avoid taxes is a Roth IRA. Many people choose to make contributions to an individual retirement account, or IRA, to help fund their retirement. A Roth IRA can accomplish that goal; … [Read more...] about Why and IRA Makes an Excellent Estate Planning Tool
If you have a Roth IRA, and you’re unlikely to need to tap into the account for retirement income, your IRA can serve as a vehicle for leaving an inheritance to your loved ones. Here’s how it works: Tax-Free Growth Contributions to a Roth IRA are made with after-tax dollars. Since you’ve already paid income tax on the money going into the account, the IRS allows that money to grow, tax-free – if you chose to withdraw money from your Roth during your retirement, you’d owe no income tax, even on … [Read more...] about The Roth IRA as an Estate Planning Tool
Unlike a traditional IRA, which offers tax-deferred growth for your retirement savings, a Roth IRA offers tax-free growth. Your contributions are not tax deductible, but after you reach age 59 ½ , the distributions you take from your Roth are not taxed – and this includes the money that initially went into the account as well as the interest earned on those funds. There are some pretty strict restrictions on who can contribute to a Roth IRA, and how much can be contributed each year. First, the … [Read more...] about Roth IRA Basics
The IRS recently announced the contribution limits for those funding an Individual Retirement Account during 2011 – and they’re the same as the 2010 limits. So, whether you have a regular IRA or a Roth, you’re allowed to contribute $5,000 to the account next year. If you’re 50 or older, you can take advantage of the “catch up” provision, and put an extra $1,000 in your IRA. What about Income Limits? If you’re considering a Roth IRA, you may be wondering whether the income limits will change … [Read more...] about What are the 2011 IRA Contribution Limits?
This year marks a change in the law that governs who can and can’t convert a traditional IRA (or 401(k)) to a Roth IRA. In the past, there were income restrictions that prevented people above a certain income threshold from converting. This year, the income restrictions have been removed, and anyone can convert. But should you? There are some things you’ll want to consider in deciding whether to convert to a Roth IRA: How will you pay the conversion tax? Traditional retirement accounts … [Read more...] about Should You Convert to a Roth?