What is “Mega Backdoor Roth IRA”? It is a financial planning technique that deals with contributing funds to a Roth IRA retirement savings account. Why does my Roth IRA need a “backdoor”? Your direct contributions to Roth IRA may be limited. There are two different limitations. The first limitation deals with the amount of money you can contribute to the account. In 2018 the … [Read more...] about “Mega Backdoor Roth” – Definitive Guide
Two recent court rulings may make you want to double-check. How often do retirement plan sponsors check up on 401(k)s? Not as often as they should, perhaps. Employers need to be especially vigilant these days. Every plan sponsor should know about two recent court rulings. One came from the Supreme Court in 2015; another, from the U.S. District Court for the Central … [Read more...] about Is Your Company’s 401(k) Plan as Good as It Could Be?
A backdoor Roth IRA conversion is a way of funding a Roth IRA account with a traditional IRA conversion instead of a direct contribution. People with relatively high incomes are unable to directly contribute to a Roth IRA. In 2018, the limitation starts at $120,000 for single taxpayers and $189,000 for married filing jointly. To get around this issue, they can make a … [Read more...] about 4 Things to Know About Backdoor Roth IRA Conversions
If you've ever left a job where you had 401(k) or similar retirement plan, you've probably received a letter from the plan administrator outlining the different options you have and their tax consequences. This document is pretty straightforward from the perspective of a tax professional or someone who works in the retirement space, however, for those without this level of … [Read more...] about Avoid Tax Consequences With a Direct 401(k) Rollover
A Roth IRA is a type of retirement account that allows the owner to contribute after-tax dollars and enjoy tax-deferred growth and tax-free distributions in retirement. The tax-deferred growth experienced in a Roth IRA allows funds to compound faster because the total amount is not affected by taxes. A Roth IRA is a great way to save for retirement and protect your retirement … [Read more...] about Roth Conversions Must Now Be Used Wisely