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IRA Plans
Tax-advantaged retirement savings plans including the traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, and self-directed IRA
886 Questions
Can you roll over your roth IRA into a sep IRA?
No you cannot. SEP-IRAs are contributory in nature meaning you can make contributions to them but you cannot rollover non-SEP-IRAs (or 401k accounts) into a SEP-IRA. If your SEP IRA is likely to become substantial or you have funds in a 401(k) from a previous employer and you are an one person (or one person with a spouse) business, you should look into individual 401(k)s. All of the major financial institution and self-directed trust companies offer them. They work like a corporate 401(k) but you have complete control. They may be better than a SEP since: 1. The contribution limits are higher 2. You can borrow against the 401(k) but not a SEP 3. You can have a Roth 401(k) but you cannot make Roth contributions to a SEP 4. You can buy life insurance or invest in a S corporationin a 401(k)
When it comes to making financial decisions, one that is confusing to many is the choice between a Roth IRA and a traditional IRA. This can be a complex discussion filled with caveats and exceptions, special cases and conversion decisions. I’m not going to get into all those details here. I simply want to explain with this post the main difference between a traditional IRA and a Roth IRA.
First, let’s tackle the traditional IRA. Here’s an account that promises tax benefits. You put money into it and you can claim a tax deduction when you file taxes for the amount of money you added to the account. In essence you get to put the money in pre-tax. Even though you may have had taxes withheld from that money initially you get it back when you file.
That’s not the only tax benefit of the traditional IRA. Once the money is in the account it will (hopefully) grow. If in a regular brokerage account the interest, dividends, and realized capital gains the account accrues would be taxable within the year they occur. So as the money grows you’d be forced to pay taxes on that growth. But if the money is invested in a traditional IRA, all of that growth is tax-free. (Technically, it’s tax-deferred because, as you’ll soon see, there is a tax bill coming.) You don’t pay taxes on the growth at the time it is happening. So when do you pay taxes on this money? You have to pay taxes on it when it is withdrawn. As you take withdrawals from the account, presumably in your retirement years, the withdrawals are taxed to you as income.
The Roth IRA also enjoys the tax-free growth. If you understand the traditional IRA then the Roth is simple. Instead of the money being taxed at the back end when you take withdrawals, it is taxed up front. So in the case of the Roth IRA, you take after-tax dollars and invest them in the account. Since you’ve already covered the taxes on those dollars, in the Roth, the money grows tax free and when withdrawn is also tax-free. The Roth IRA allows you to get your taxes out of the way up front and not to have to worry about paying taxes on your retirement income.
So which is better? It depends entirely on your unique situation and what is going to happen in the future. Since none of us knows the answer to the latter, I suggest discussing the former with a financial professional and coming to decision that is right for you.
Can you merge a Traditional IRA and a Roth IRA?
No, because the taxation on disbursement will be different.
Yes you can close the account. However if you simply take the money, then you will owe not only regular income taxes on it, but you would be subject to a 10% penalty as well. Unless it is a qualified distribution in which the penalty could be avoided. If you want to simply "move" the money into another IRA then you can do that penalty free by filling out account transfer forms at the receiving institution.
Can you contribute to an IRA after you have retired?
Eligible Compensation
You must have eligible compensation in order to be eligible to contribute to an IRA. For IRA purposes, eligible compensation includes wages, salaries, tips, commissions received as a percentage of sales, taxable alimony and separate maintenance payment you receive under a decree of divorce or separate maintenance. If you are a sole proprietor or a partner, your compensation is based on your net earnings from your trade or business, reduced by contributions to any employer-sponsored plan that you adopt and any deduction allowed for 50% of your self-employment taxes (see page 7 of the 2004 version of IRS Publication 590).
Amounts you receive as interest, dividends, pension, annuity, earnings and profits from property investments, and any amount you exclude from your income are not considered eligible compensation for IRA purposes.
Can you roll an IRA into a 457?
I have the SAME question. $45k sitting in a traditional IRA earning 4% with CD's. I'm now with county govt. Want to get some money moved into the 457 plan (with ICMA) to earn possibly higher. Are there fees, expenses, penalties? Can it be done?
When are contributions made into IRA accounts?
You can make contributions any time during your tax year to an IRA account. Total IRA contributions for the tax year may not exceed your taxable income or $5,000 ($6,500 if over 50).
Which of these instruments requires an investor to begin withdrawing funds by age 70.5?
traditional IRA
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