Podcasts Business Investing Your Money, Your Wealth Investing for Retirement Questions Answered - 74

Investing for Retirement Questions Answered - 74

Published: Oct. 15, 2016, 6 p.m.

In YMYW podcast episode 74, Joe Anderson, CFP\xae and Alan Clopine, CPA answer questions about investing for retirement, covering investment options for 403(b) accounts, tax implications of moving part of your IRA and how to avoid tax penalties when withdrawing from an IRA. Original publish date October 15, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

06:30 - \u201cIf you have a 401(k) that has a Roth option, you can put $18,000 (per year) into that Roth 401(k).\u201d

07:51 - \u201cIf you have a 401(k) that allows you to put yet more money into the 401(k) after you max out, some plans allow you to put after-tax money into that 401(k)... here\u2019s why this could be such a good idea, particularly if you\u2019re close to retirement\u2026\u201d

11:11 - \u201cHow should I invest my 403(b)?\u201d

14:38 - \u201cOur advice is always to maximize those (employer\u2019s retirement) plans.\u201d

22:05 - \u201cWhat are the tax implications of moving a portion of an IRA to open a new IRA with a different firm?\u201d

27:17 - \u201cWith a 401(k) by law it\u2019s mandatory to withhold 20% in taxes if you do that with the 401(k).\u201d

28:44 - \u201cTaxes don\u2019t stop when your paycheck does \u2013 once you start tapping that retirement nest egg for your living expenses, there are all kinds of new rules and opportunities.\u201d

30:14 - \u201cWill I be penalized for an IRA withdrawal?\u201d

32:08 - \u201cThere is no age limit for Roth IRA conversions \u2026so if you take money from your IRA and move it into a Roth IRA, there is no 10% penalty on that conversion. The IRS classifies that as a rollover. There would be a 10% penalty if you\u2019re under 59 \xbd and you withheld taxes when you did the conversion.\u201d

32:36 - \u201cHere\u2019s another mistake: don\u2019t withhold taxes when you do a conversion \u2013 pay the tax the following year in April when you do your taxes. If that tax bill is too high, re-characterize some, part or all of the IRA that you converted back into the IRA.\u201d