Posts Tagged ‘Earned Income’


How to Use a Roth IRA to Purchase Your First House

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It can be difficult for younger people to save up to purchase their first house.  Paying rent, making a car payment and perhaps paying off a student loan can drain your cash flow. While a Roth IRA is designed to be used for retirement one possible use would be to use a Roth IRA for the down payment on your first … Continue reading »


3 Reasons I Encouraged My Son to Open a Roth IRA

I recently suggested to my son that he open a Roth IRA.  Here are the 3 reasons why.

 

 1) He’s Young

The Roth IRA offers a huge advantage over a regular IRA. This is particularly so for younger people.  With the IRA you are (generally) allowed a tax deduction for this.  The IRA grows tax deferred. You can begin to take distributions after age 59 1/2 without penalty.  You must begin taking distributions after … Continue reading »


4 Reasons All Employers Should Offer a Roth 401(k) Plan

 

1) The Roth 401(k) Plan Has a Higher Contribution Limit that a Roth IRA

Taxpayers can contribute up to $5,000 per year into a Roth IRA. Taxpayers over age 50 can contribute an additional ‘catch-up’ contribution of $1,000 for a total of $6,000.  To contribute to a Roth IRA you need to have earned income at least up to the amount of the contribution. Earned income is from wages as an employee (Form W-2) or … Continue reading »


The Difference Between an IRA and a Roth IRA

Deciding whether to open an IRA or  a Roth IRA is a major decision with potentially large financial consequences. Both forms of the IRA are great ways to save for retirement, although each offers different advantages and rules. 


IRA…All the Way…to Retirement!

The IRA (Individual Retirement Arrangement) is one of the more underutilized tools for retirement planning.  The primary benefit to an IRA is tax-deferred investing.  Income taxes are not paid until taxable distributions are made.  With limited exceptions, distributions made prior to age 59½ are subject to a 10% penalty in addition to income taxes.


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