Last year (2010) presented a unique opportunity for even high income earners to convert their traditional IRA or 401(k) account to a Roth IRA. I strongly considered doing that for our IRAs but after running some numbers, I decided against it. Many others pulled the trigger on the conversion. Subsequent economic conditions may have created reasons for some to “undo” their Roth IRA conversion.
It’s time to adjust our retirement plan contributions for 2010. These plans include 401(k) plans, individual and spousal IRAs, and our Health Savings Account, which we use for retirement savings. Read more
Most of you know that 2010 presents a tremendous opportunity for baby boomers with higher incomes to open a Roth IRA and/or to convert a conventional IRA to a Roth. The reason is that the current income limitations on Roth contributions and conversions will be lifted. Read more
Most retirees know by now that in the Worker, Retiree, and Employer Recovery Act of 2008, Congress waived required minimum distributions in 2009 from IRAs, 401(k) accounts, and certain other retirement plans. The intended benefit was to prevent retirees from being forced to sell invested assets during a severe market decline. Read more
One of the worst financial decisions a baby boomer can make is to raid a tax-deferred retirement account such as an IRA or 401(k) to pay for non-retirement expenses. I like to call these early withdrawals “retirement plan leaks” although sometimes they are more like floods! Read more
I have previously written about the potential benefits of a Roth IRA for retirees. If you currently have a non-Roth IRA, the questions about the benefits of converting are becoming more urgent. This is because of the window of opportunity for conversion to a Roth (without income restrictions) that is opening in 2010. Read more
If you have an IRA or want to use an IRA as part of your retirement income plan, it helps to know how you will be able to manage distributions. There are online tools that will help you do this. Read more
Our retirement assets are down but should not be forgotten. Depleted or not, there are plenty of folks out there who would like to have them. That includes creditors. So what kind of protection is available for retirement accounts from the claims of creditors? Read more
Many members of the baby boomer generation are experiencing significant and perhaps abrupt transitions in their family status. Their children have left home to lead independent lives. Spouses have retired or perhaps even moved on to become ex-spouses. Changes in boomer families can create a need for changes in your retirement plan documents.
With tax rates heading up for many baby boomers and with 2010 presenting an opportunity for Roth IRA conversion, funding an IRA in 2008 and 2009 can be an important retirement planning strategy.
IRA funding limits for 2009 have been set for various scenarios and you should consider all of them.
I find it helpful to use online calculators to: (a) help determine whether a taxpayer is eligible for a traditional, Roth, Roth-conversion, and/or non-deductible IRA; and (b) help compare the relative financial benefits of each different IRA type. I have found two online IRA calculators that I like in particular. Read more