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July 12, 2013 | Liz Weston, Money Talk
Dear Liz: Everyone talks about Roth IRAs and how beneficial they are. But I am self-employed, my husband contributes 16% toward his 401(k), our house is paid off, and we no longer have dependents to deduct on our 1040 tax return. My contribution to my traditional IRA is the only tax deduction we have left. Should I consider a Roth anyway? If so, why? Answer: A Roth would give you a tax-free bucket of money to spend in retirement. That would give you more flexibility to manage your tax bill than if all your money were in 401(k)
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BUSINESS
December 29, 2013 | Liz Weston, Money Talk
Dear Liz: I have about $16,000 in student loans at 6.8% interest. At the current monthly payment it would take me about 7.5 years to pay them off. I contribute 10% of my income to my company's Roth 401(k) plan (my employer matches the first 6% contributed). I also contribute 3% to the stock purchasing plan. I am thinking of cutting back my 401(k) contribution to 6% and not contributing to the stock purchasing plan. Applying the extra money to my loans would reduce the payback period to about 2.5 years.
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BUSINESS
February 14, 1999
Trying to figure out whether to open a Roth individual retirement account? It looks like a good deal for most people, but you can't earn too much money and there are other rules and limitations. For answers to some of the most common questions about them, see http://www.latimes.com/HOME/NEWS/WALLSTCA/rothira.html. You'll also find several sites that provide "calculators" to help you decide the pros and cons.
BUSINESS
October 13, 2013 | Liz Weston, Money Talk
Dear Liz: Recently my mother passed away. My brother and I were fortunate enough to inherit a substantial amount of money from her life insurance. My brother and I do not want to spend this money and have placed the funds in brokerage accounts. My question is this: Because of the often-volatile market, is there a better way to invest this money? Should we take this money out of the market and save some of it in a bank? Answer: Your first task with a windfall is to determine your goal (or goals)
BUSINESS
November 1, 1998
Trying to figure out whether to open a Roth individual retirement account? It looks like a good deal for most people, but you can't earn too much money and there are other rules and limitations. For some answers to some of the most common questions about them, see htt://www.latimes.com./HOME?NEWS?WALLSTCA/rothira.html. You'll also find several sites that provide "calculators" to help you decide the pros and cons.
BUSINESS
February 6, 1999 | Bloomberg News
The Internal Revenue Service has made it harder for investors to lower their tax bills by switching back and forth between regular individual retirement accounts and the new Roth IRAs. In October, the IRS closed the door on a strategy that allowed investors to lower their taxes by making multiple conversions between traditional IRAs and Roth IRAs. The tax agency said investors could convert just once more in 1998 and only once in 1999.
BUSINESS
September 10, 1998 | LIZ PULLIAM, TIMES STAFF WRITER
If you were wavering about whether to convert your traditional individual retirement account to a Roth IRA, you might want to make up your mind soon. The recent plunge in the stock market means that if you decide to convert now, you could wind up paying a lot less in taxes than you would have earlier this year. Furthermore, people who have already switched might want to consider undoing their previous conversion and then convert again, if their accounts have lost sufficient value in the interim.
BUSINESS
December 23, 2001 | KATHY M. KRISTOF, TIMES STAFF WRITER
Do you have stocks tucked away in a traditional individual retirement account that have the potential to be winners but currently are money losers? If so, it may be time to transfer them to a Roth IRA. "It's almost like a half-off sale," said Ed Slott, a New York tax accountant who writes a retirement newsletter called the IRA Advisor. "If your IRA has dropped significantly in value, not only will the cost [of converting to a Roth IRA] be minimal, all the upside would be tax-free.
BUSINESS
March 26, 1998 | TOM PETRUNO
Most people on Wall Street figured the new Roth individual retirement account would be hot. But maybe not this hot. Major mutual fund companies say they're opening huge numbers of Roth accounts, as well as traditional IRAs, so far this year. And predictably enough, most of the investments being chosen for these accounts are stock funds--another good reason why the U.S. market has continued to soar.
BUSINESS
January 11, 1998 | RUSS WILES, Russ Wiles is a mutual fund columnist for The Times
The Roth IRA, which gives large numbers of Americans a new tax break, comes with a problem: If you are putting mutual funds into it, what type of funds should you choose? Investors face the same decision with a tax-deferred retirement account such as a traditional IRA or a 401(k). But because a Roth IRA's income may not ever be taxed, your choice has greater impact. Only $2,000 may be placed in Roth IRAs each year.
BUSINESS
August 2, 2013 | Liz Weston, Money Talk
Dear Liz: I am a CPA and fairly knowledgeable about investing, but I have a question about my IRAs. I am 58 and my husband is in his mid-80s. We both are retired with federal pensions and no debt other than a mortgage. My plan is to start taking money annually from my traditional IRA in two or three years. I want to reduce the required minimum distribution I will need to start taking at age 701/2 and lessen the tax impact at that time. Should I put these annual withdrawals in my regular investment account or should I put them in the Roth IRA?
BUSINESS
July 12, 2013 | Liz Weston, Money Talk
Dear Liz: Everyone talks about Roth IRAs and how beneficial they are. But I am self-employed, my husband contributes 16% toward his 401(k), our house is paid off, and we no longer have dependents to deduct on our 1040 tax return. My contribution to my traditional IRA is the only tax deduction we have left. Should I consider a Roth anyway? If so, why? Answer: A Roth would give you a tax-free bucket of money to spend in retirement. That would give you more flexibility to manage your tax bill than if all your money were in 401(k)
BUSINESS
June 7, 2013 | Liz Weston, Money Talk
Dear Liz: My husband and I have been putting 5% and 6%, respectively, into our 401(k) accounts to get our full company matches. We're also maxing out our Roth IRAs. The CPA who does our taxes recommended that we put more money into our 401(k)s even if that would mean putting less into our Roth IRAs. We're also expecting our first child, and our CPA said he doesn't like 529 plans. What's your opinion on us increasing our 401(k)s by the amount we'd intended to put into a 529, while still maxing out our Roths, and then using our Roth contributions (not earnings)
BUSINESS
March 1, 2013 | Liz Weston, Money Talk
Dear Liz: I just turned 70. Must I draw now from my IRA? I still work full time. I heard from one investment company representative that since I work, there is an exemption that I may not have to start withdrawals. Is this true? Answer: You can postpone withdrawals from your company's 401(k) plan past the typical required minimum distribution age if you're still working, but not from traditional IRAs. "An IRA owner must commence distributions from an IRA by April 1 of the calendar year following the year in which the IRA owner turns 701/2," said Mark Luscombe, principal analyst for tax research firm CCH Tax & Accounting North America, "regardless of whether they are still working or not. " With 401(k)
BUSINESS
December 9, 2012 | Liz Weston, Money Talk
Dear Liz: I'm about to marry an active-duty military man. We're in the process of marrying our finances, and I have several questions. First, what is a good emergency fund for us? We run our household on his salary because I'm recently unemployed. I've always had a six-month emergency fund for myself, but because he'll theoretically always be employed, should we have less savings in emergency funds and more in retirement and investments? Second, along with my unemployment, I'm bringing about $15,000 in savings and $9,000 in student loan debt (at 4.5%)
BUSINESS
February 12, 2012 | Liz Weston, Money Talk
Dear Liz: I am a 20-year-old college student with a stable, part-time job. I haven't contributed to a 401(k) with this company because I don't plan to be working for it for two years, which is how long I'd have to wait for my contributions and earnings to be 100% mine. I'd like to open a Roth IRA, but I'm not sure I'm eligible. I'm listed as a dependent and our household adjusted gross income is between $145,000 and $155,000. Can I open a Roth? Answer: The short answer is yes, although you may want to reconsider contributing to your workplace 401(k)
BUSINESS
August 26, 2001 | LIZ PULLIAM WESTON, TIMES STAFF WRITER
Question: My wife and I each contributed $2,000 to our Roth IRAs in 1999 and 2000. The accounts are worth less than what we contributed. Because they have lost money, is there a penalty for cashing them out? Are there tax repercussions? Answer: The penalty is about $215,000 for each of you. That's not a fine that's levied by the IRS, which couldn't care less if you withdraw your principal from a Roth IRA.
BUSINESS
October 30, 2011 | Liz Weston, Money Talk
Dear Liz: After nine months of unemployment I finally landed a new job, but at half my former $100,000 salary. In this economy I was happy to get it. I always contributed the maximum to my 401(k) and employee stock purchase plan, but my new company does not offer either of these options. I made it through my period of unemployment on severance, savings and belt tightening. Other than a mortgage, I have no debt. I realize I need to both catch up on missed contributions and continue to put away money for retirement.
BUSINESS
June 5, 2011 | Liz Weston, Money Talk
Dear Liz: I am 22, single, work full time and have no outstanding debts. I have $18,000 in a savings account and am contributing 15% of my paycheck to a 401(k). How do I invest my savings to get a better return? I've been looking into certificates of deposit, money market accounts, IRAs and Roth IRAs, but don't know enough to start. Answer: Let's first get clear on some terminology. CDs and money markets are types of investments, while IRAs and Roth IRAs are types of accounts — specifically, they're retirement accounts.
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