It’s Frothy Finance Friday everyone! Come grab a beer with me every Friday in this virtual happy hour.
This week’s topic: Bourbon Barrel-aged Stouts and Backdoor Roth IRAs
What is a Mega Backdoor Roth IRA?
A Mega Backdoor Roth IRA strategy could be a great option for individuals who have maxed out all of their other tax-advantaged accounts, but still want to save more money for retirement in a tax-preferred manner. For those that are eligible (more on this in a bit), the Mega Backdoor Roth IRA strategy could allow you to contribute up to $37,000 to your Roth IRA per year, with no income limitations. If your spouse is also eligible to contribute to a Mega Backdoor Roth IRA, then the strategy would allow you to contribute up to $74,000 cumulatively as a couple to your Roth IRAs per year!
Using Roth IRAs to Save for College – The Pros and Cons
Roth IRAs are a great, tax-efficient way for many families to save money for retirement, but can they also be useful in college education planning? Should you utilize a Roth IRA or a more traditional college savings account, such as a 529 plan, when saving money for your children’s college education? The answer is it really depends. If you’re absolutely certain that you want this money to be used to pay for your children’s education expenses, then it’s really hard to beat the tax-efficiencies of your state’s sponsored 529 plan. With that said, there are several interesting characteristics of a Roth IRA that could make it the superior option for some families…
A Comprehensive Guide to Roth IRAs
Since first being introduced in 1997, Roth IRAs have become an increasingly popular retirement savings vehicle, and understandably so. There’s a lot to like about Roth IRAs, particularly for younger investors who can benefit the most from many of the Roth IRA’s features. While most people have at least heard of a Roth IRA, there tends to be a lot of confusion regarding the nuances and details of these accounts. This article is meant to clarify what exactly a Roth IRA is, what it isn’t, and why I think it’s a great place for investors, particularly younger professionals, to start saving money for retirement…
Backdoor Roth IRAs – Part 2 - Pitfalls to Avoid
The IRA Aggregation Rule states that when an individual has multiple IRA accounts (Traditional IRAs, along with SEPs and Simple IRAs), for conversion purposes, all of these accounts are considered one large account. In these cases, the individual cannot say that he/she solely wants to convert his IRA to a Roth from the nondeductible portion of his/her IRA accounts…
Backdoor Roth IRAs – Part 1: An Introduction
Roth IRAs have become an increasingly popular retirement savings tool for Americans, and rightfully so. The accounts grow tax deferred and, if held until 59 ½, the growth in the accounts can be withdrawn at a 0% income tax rate. Also, unlike its Traditional IRA cousin, owners of Roth IRA accounts do not have to…
