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Though set up to help regular people save, IRAs are fraught with complicated tax rules. Missteps can be made without the owner knowing it until it is too late to correct the problem. The result often is higher taxes and penalties. Sometimes the result is reduced IRA options. Here are some little-known but very common […]
Most people who are busy accumulating large balances in their IRAs and 401(k)s forget that the IRS holds a mortgage on those accounts. You put pre-tax dollars in the accounts and let income and gains compound tax deferred. But that balance in the IRA is not all yours. The price for those tax breaks is […]
With today’s tricky tax law, the account in which you hold an asset can be as important as which assets you own. Unfortunately, too little attention is paid to the issue of which accounts should hold which investments. Most of us have more than one type of investment account: 401(k)s, traditional IRAs, Roth IRAs, taxable […]
President Bush signed the new bankruptcy law, which we gave advice notice about in last month’s visit. Here are details of how the final law applies to pensions and IRAs. Retirement funds are exempt from the bankruptcy estate if they are exempt from federal income tax under tax code sections 401, 403, 408, 408A, 414, […]
Many aspects of retirement planning changed over the last decade. One piece of conventional wisdom that has endured is to maximize contributions to IRAs and 401(k) plans. I’ve questioned that in the past, and it is time again to question this advice. IRAs and 401(k)s are tax shelters. Changes in the tax law alter the […]
Does your IRA have to be invested in publicly-traded securities or mutual funds? Few people realize that the answer is “no.” The IRA actually is one of the most flexible investment vehicles available. An IRA can be invested in real estate, private companies, hedge funds, separately managed accounts, mortgages, and a host of other assets. […]
Every general rule has its exceptions. IRAs are no different. The general rule for IRAs is to leave investments in them as long as possible. Your wealth will increase if income and gains are allowed to compound tax deferred as long as possible. We demonstrated that in the September 2003 discussion of which retirement accounts […]
Does the 2003 tax law change how your retirement account should be invested? Most investors have some of their money in tax-deferred accounts – such as IRAs and 401(k)s – and the rest in taxable accounts. When a portfolio is diversified, the investor has to decide which assets to purchase in a tax-deferred account and […]