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Starting a Roth IRA will become more popular in the years to come because it is likely that the income tax rates will rise and due to this fact, it is the best IRA in rising income tax environment. While most people focus on the income tax benefits of the Roth IRA, there are numerous benefits related to estate planning as well. A Roth IRA has the unique ability of allowing you to leave money to your heirs without leaving them an income tax bill to go along with it. If you had a traditional IRA, income taxes would have to be paid on any amount that is withdrawn from the account. When money is withdrawn from a Roth IRA account, there are no taxes to pay because the contributions were made after taxes were taken.

The second benefit is that you will be able to leave a larger amount of money to your heirs because the money in the account can continue to grow tax free until the date of your death. With a traditional IRA, there are withdrawal requirements that force you to make withdrawals as soon as you reach 70 1/2. For example, if you were to take $2,000 out of the traditional account, you would have to pay $500 in taxes. That’s $500 less that you can leave to your heirs. Continue reading ‘Roth IRA Benefits – Best IRA With Rising Tax Rates’ »

Indeed, the most efficient way to create higher rates of return from your individual retirement account or IRA is by fully understanding the rules and regulations that cover it. As an investor of a Roth retirement plan, it’s essential that you are aware of the Roth IRA restrictions. These are the income and contribution limits a taxpayer should strictly follow, because they are the primary factors that affect a taxpayer’s eligibility to benefit from a Roth IRA Continue reading ‘Roth IRA Restrictions – Know Your Limitations’ »

Investing in gold for IRA accounts will protect your retirement from inflation. Investing in gold for IRA accounts can be done in two ways. It is simple to do and most IRA’s allow both physical and paper (gold stocks) gold in the IRA. Continue reading ‘Investing in Gold For Your IRA’ »

I recommend my clients use a Roth IRA to grow their retirement savings tax-free. Because I know the various types of IRAs can seem a little confusing, I thought I would take some time today to answer the questions I get most often from clients.

What is a Roth IRA?

It is a type of individual retirement account that features tax-free withdrawals because the original contributions are made with after-tax money. Continue reading ‘Roth IRA FAQ’ »

The IRA deduction for tax purposes is one of the biggest perks to investing in a traditional IRA. The question is whether you will actually be able to deduct all of the money you contribute in a given year. There are some rules that will determine this on an individual basis.

The biggest rule to be familiar with involves other types of retirement plans that you may be a participant in. If you are participating in any type of retirement investment plan through your employer, then chances are you will not be able to deduct all of your contributions to a traditional IRA plan. Continue reading ‘IRA Deduction Rules For a Traditional IRA’ »

Today, all investors with any type of IRA account have to check the current IRA contribution limits to determine how much money they are allowed to invest over the course of the year. For many years the limit was stable at $2,000, but in recent years the IRS started to raise that amount based on the rising cost of living across the country.

Due to considerable increases in the national cost of living in our country, the IRS raised the maximum contribution to $5,000 in 2008. For the 2009 IRA limits, this limit remains the same but there are some other things to consider before assuming this is your limit. Continue reading ‘What Are the 2009 IRA Limits?’ »

The Individual Retirement Account, or IRA contribution limits change every year, depending on the Federal government’s analysis of the changing standard of living rates across the country. For a long time these limits stood at $2,000 a year, but in 2008 they were raised. Now, investors with any type of Individual Retirement Account must check annually to determine whether the contribution amounts have changed from the previous year.

In 2008, the IRS raised the IRA contribution limit to $5,000 thanks to a higher price of living in our country. For 2009, this limit remains unchanged. Yet, there are some additional things to be considered.

First, the $5,000 yearly contribution limit is for the total contributions of all of your IRA and 401K accounts, even if they are different types of accounts. So, instead of investing this amount into each account, your total sum of all accounts must be at or under this limit. Continue reading ‘Individual Retirement Account – IRA Contribution Limits?’ »

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An Individual Retirement Account or IRA is a “must have” for a comfortable retirement. The good thing about this savings account is that you can select from the variety of IRAs available, wherein each has different benefits and tax structures. Many investors believe that the most efficient retirement vehicle is a self directed Roth IRA.

The most distinct characteristic of Roth retirement accounts is that the funds you will contribute can be distributed when you reach your retirement age without tax. Though, you should understand that your contributions to a Roth are being added on an after-tax-basis. This means that the contributions are not allowed to be deducted from your federal income taxes. In this retirement plan, you make use of after-tax money in which you don’t have to recompense any federal income tax on the amount that you will withdraw or distribute when you retire. Another significant benefit of a Roth IRA is you don’t have to worry about age restrictions in making contributions. Continue reading ‘Setting-up a Self Directed Roth IRA’ »

Are you considering converting to Roth IRA in 2010 when there are no IRS restrictions? If you decide to do so you are required to pay income taxes on the amount converted. This payment now of the taxes you would ordinarily pay many, many years into the future has a significant opportunity cost that you may not be aware of that makes converting a poor financial decision.

In 2010, anyone with a traditional IRA can convert that account to a Roth IRA without having to comply with existing IRS limits for adjusted gross income. Continue reading ‘Roth IRA Conversion – Don’t Do It’ »

What are the Roth IRA income limits?

As of 2009, the maximum income limits for making a contribution are…

* $176,000 for those who are married and filing jointly on their tax return.
* $10,000 for those who are married, lived with their spouse at any time during the course of the tax year, and are filing separate tax returns.
* $120,000 for those who file as either:

a) Single
b)Head of household
c)Married filing separately and did not live with their spouse during any part of the tax year.

If you want to know how much you can contribute, then compare your taxable income to the situation above which describes your tax filing status.

If your current income exceeds the amount associated with your tax filing status, you can NOT make a Roth IRA contribution for the current tax year. Continue reading ‘Roth IRA Income Limits’ »