Category: investing

How the new tax law creates a ‘perfect storm’ for Roth IRA conversions

While the new Tax Cuts and Jobs Act (TCJA) includes one negative change for Roth IRAs, they are still pretty wonderful. Here’s what you need to know about Roth IRAs and especially Roth IRA conversions in the post-TCJA world.

The two most-important Roth IRA tax advantages are:
Unlike traditional IRA withdrawals, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free too. What is a qualified withdrawal? It’s one that is taken after you, as the Roth account owner, have met both of the following requirements:

1. You’ve had at least one Roth IRA open for over five years.
2. You’ve reached age 59½ or become disabled or dead.

I need to investigate if item 1 above is correct. You only need to have ‘at least on Roth IRA open for over five years’?

Read the rest here.


50 Personal Finance Habits Everyone Should Follow

For the Son and/or Daughter.

Hopefully, you have a lot of good personal finance habits too. How many of these apply to you?

1. Taking advantage of your employer’s flexible spending account. These accounts not only reduce your tax liability, but they also act as a de facto quasi-savings plan.

10. Saving part of your income for retirement. Try saving at least 10 15 percent from every paycheck; it’s never too late to start.

12. Spending less than you earn every month. File this one under “D” for “Duh!”

23. Paying the bills on time. By doing so you’ll avoid spending money on needless late fees.

43. Negotiating whenever the opportunity presents itself.

Read them all here.


3 Ways to Protect Your Retirement Money From a Market Downturn

Last week we got a reminder of just how volatile the stock market can be, when the Dow Jones Industrial Average plunged more than 370 points, or 1.8%, in a single day on political turmoil in Washington. The stock market has already recovered from that setback. But at some point, though we don’t know when, this aging bull market will give way to a bear …

With that goal in mind, here are three moves you should make now.

Regarding #3:
Dear JARguy,
... be fearful when others are greedy and greedy only when others are fearful. - Warren Buffett