For most high-income earners, the decision to make an IRA contribution is a personal one. One significant benefit of contributing to a Traditional IRA is the tax-deferred growth; however a significant drawback is the growth portion of future distributions is taxed as regular income. For the benefits and drawbacks of IRA contributions for high-income earners, read this Financial Strategy.
If you’re faced with a bankruptcy situation, there are federal laws in place that protect your assets held inside qualified retirement plans such as a 401(k) or an IRA. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 extends some of these safeguards. For more information on how much is protected by these laws, read this Financial Strategy.
Funds inside a retirement plan that are exempt from income tax are protected from bankruptcy; however, there are limitations.
If you are planning the sale of your medical practice to finance your retirement, you may need to increase the value of your practice.
The Pension Protection Act of 2006 was aimed at increasing retirement savings. Most notably, employers were allowed to automatically enroll employees in the company’s 401(k) plan.
The Economic Growth and Tax Relief Reconciliation Act of 2001 included provisions that should simplify many investors’ retirement accounts, and possibly decrease the number of separate accounts needed.
Although you may withdraw money from an IRA at any time, these funds are intended for retirement. To encourage you not to touch this money until you retire, the IRS imposes penalties for early withdrawals.
With some simple planning, you can turn your child’s summer of mowing lawns into a well-funded retirement account
Traditional IRAs allow you to save for retirement on a tax deferred basis, while Roth IRAs are funded with after-tax contributions.
Once you reach 70½, you are required to withdraw from your IRA. How much do you withdraw? The IRS has simplified the calculation with Life Expectancy Tables to help you calculate your withdrawal.
