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As you are aware, a Roth IRA and Roth 401k will have a significant effect on retirement planning over the upcoming year. Those who fall into the Generation X and Y crew will soon realize that their Roth IRA will be a very important part of their investment planning. Basically, it is the best possible planning tool for anyone that is under the age of 50. In 2009, there are some significant changes that have been made in the rules, as well as in the phase-out limits. There are seven changes that everyone with this account, or even those planning to start one, should be aware of.

#1: Free money and then more free money! While a Roth IRA is a great retirement savings tool, a 401k is also a great option. If your company offers any match, take advantage of it. This is like getting free money. After you take the offered match, you can then tend to your account which will later provide you with tax-free money when you make an IRA withdrawal from the account after reaching retirement age. Continue reading ‘Roth IRA 2009 Rules’ »

Rules Which Apply to Married Couples

Many people wonder how the Roth IRA rules and regulations change when they get married and what happens when filing jointly or separately. These are important questions to ask, and the answers must be understood. Your Roth IRA account is one of the most powerful tools when planning for retirement and still considered the best IRA choice, so it is very important that you know and understand how things work.

Married and Filing Separately or Jointly?

The first thing to consider for married couples with a Roth IRA is the IRA contribution limits. In 2009, if the married couple files their taxes jointly, they can only have a combined AGI of $176,000. If the amount is higher, you will not be allowed to make further contributions to your Roth IRA. Some people believe they can avoid this by filing separately, even if they are married. This will not solve the problem. In this case, the married individual that is filing separately can only make contributions to the Roth IRA if the modified adjusted gross income does not exceed $10,000. The IRA limits are so low because the government wants to deter married couples from filing separately. If this situation arises, you cannot do anything about any contributions that were made in previous years, but you will be required to remove any contributions that were made in 2009. Continue reading ‘Roth IRA Married Filing Separately Or Jointly’ »

If you have a trustee for your IRA retirement account, be aware that many of them will not act as the trustee if there are unconventional investments involved. This includes self directed IRA for real estate. In this case, the IRA account owner will have to find their own trustee that will provide the services needed. It is possible to find a trustee online, but you should start by asking your CPA to see if there is someone they recommend. If you do look online, begin by searching for “self-directed IRAs.” This search will return a list of qualified trustees that can handle you account and any unconventional investments. Nonbank organizations are approved by the IRS and can act as a trustee for your account. Trustees that do handle real estate investments will also oversee all other investments, including stocks, mutual funds and bond. The fact that they also deal with real estate gives them an edge when competing for business. Most often, trustees will not handle an account that involves any unorthodox investments.

When you locate a trustee, consult with your CPA before taking any further steps. In addition to advising you on what is the best IRA, your CPA can perform a credibility check which will determine if your selected trustee is professional and financially stable. It is very important to have the right trustee handling your investments. The wrong trustee can place all of your assets at risk. Continue reading ‘IRA Investments – Trustee, Self-directed IRA & Self-Dealing’ »

IRA Investing: The Dos and Don’ts

Anyone who starts a Roth IRA and invests in an IRA will find that they have hundreds of options that are available including even a precious metal IRA. Investment choices include investing in stocks, mutual funds, bonds, derivatives, gold coins and real estate. Most people have a financial advisor who will advise them what is the best IRA and where to invest their money. It may be difficult to make these investment decisions, especially if the investor wishes to hold the investment in an IRA retirement account. Regardless of the available choices to the client, the CPA should be aware of all possible investments.

Since traditional IRA account investments are the most common, all CPAs are aware of these. The question is whether they are aware of investments that are outside of the country or involve real estate. Your CPA will need to know if these are viable investments for an IRA and whether they can be made legally. There are many of these types of questions that are not answered. There is plenty of information regarding distribution limits and deduction limits, but other issues are seldom addressed. Continue reading ‘IRA Investing – The Rules’ »