There’s a good chance that you’re familiar with what a Health Savings Account (HSA) is. You may not have one, but you may have considered opening one at some point in recent years as it has become a common offering by many employers. If you are unfamiliar with HSAs, they are tax-free accounts that can be used to pay for qualified medical expenses and are used in conjunction with high deductible health plans. Distributions used to pay to medical expenses are tax free and there are no income limits for contributions. Furthermore, HSAs can be a great long-term investment as Continue reading Going Up? 2020 HSA Limit Increases Announced
It’s not uncommon for people to create and fund investment accounts outside of their retirement accounts. After all, investing for retirement can be done outside of a 401(k) or an IRA and even those accounts allow limited contributions each year. With that in mind, a non-retirement investment account can be a great supplement to your retirement accounts once you have maxed out your yearly contributions. A non-retirement investment account can help you grow your nest egg as well as provide an emergency fund that you can tap into at any time. These investment accounts also provide much better returns and Continue reading Max Out Your Yearly Contributions? Consider a Non-Retirement Investment Account
Do you know the difference between a Roth IRA and a traditional IRA? Chances are, you probably do, but in case you forgot, a with a traditional IRA, your taxes are deferred on the money you contribute until you take a distribution from your account. With a Roth IRA, your contribution money hits the account after taxes have been taken out, which means no taxes on future distributions. This makes Roth IRAs very advantageous, especially if you anticipate being in a higher tax bracket in retirement or in the future. Other highly touted advantages to a Roth IRA include no Continue reading Is a Roth IRA Right for You?
Did you know that if you are 70 ½ and have earned income that falls within the Roth income limits you can make Roth IRA contributions? It should be noted that you cannot make traditional IRA contributions after you turn 70 ½, only Roth IRA contributions. Unfortunately–and sorry to burst your bubble here–retirement payments, Social Security benefits, and investment income are not considered earned income. So, if you were planning on trying to meet the Roth IRA contribution standards with those, you are out of luck. Most likely, you will need either W-2 income or self-employment income to make Roth IRA contributions Continue reading Roth IRA Contributions Over 70 ½? If You Have Earned Income, Yes!
Do you know the limits to your retirement accounts? Do you know the ultimate amount that you can contribute each year? What about withdrawals? Do you know when and how much you can withdrawal at a given point in time? It’s important to know the limits of your retirement accounts so that you can both maximize how much you are saving (if that’s what you seek to do) as well as know when you can take distributions without being penalized. Furthermore, knowing when and how you can take distributions is important in case of an emergency (i.e. an unexpected illness Continue reading Knowing Your Limits