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☆ What Is a Roth IRA and How Does It Work?
▼ + stars: | 2023-08-16 | by ( Tanza Loudenback | ) www.wsj.com time to read: +13 min

How does a Roth IRA work? “A Roth IRA offers investors a lot of flexibility which, in my opinion, is its biggest benefit,” says Eric Presogna, a financial planner in Erie, Pa.How is a Roth IRA different from a traditional IRA and from a 401(k)? The annual limits apply to traditional and Roth IRAs, in aggregate—meaning you can’t add more than the allowed amount to your traditional and Roth IRAs combined. High-income workers can use the “backdoor Roth” strategy to get money into a Roth IRA. How to fund a Roth IRAA Roth IRA typically needs to be funded before you can start choosing investments.

Persons: Roth, “ Roth, ”, David Edmisten, Internal Revenue Service doesn’t, you’re, Roth IRAs, we’ll, “, Eric Presogna, Nick Cantrell, don’t, posttax Roth, Cantrell, Zach Teutsch, brokerages, IRA —, ” Teutsch Organizations: IRA, Internal Revenue Service, Roth IRA, Washington , D.C, Fidelity, Vanguard, IRS, Financial Locations: Prescott, Ariz, Erie, Pa, Massachusetts, Washington ,

A 401(k) is an excellent retirement savings account, but it shouldn't be the only one you choose. Tax diversification in retirement will protect you from changes in tax law and keep money flowing. The benefits of tax diversification in retirementInvesting in both pre- and post-tax retirement accounts gives you the best of both worlds. If you have extra funds available, consider investing next in an after-tax account like a Roth IRA or Roth 401(k). In other words — like the benefits of portfolio diversification, tax diversification reduces your overall risk from tax law changes or other policy changes.

Persons: you've, Roth, there's, you'll, Roth IRAs, you'd, Uncle Sam Organizations: Service, Roth Locations: Wall, Silicon

I didn't really know all the details when I first set up my retirement plan years ago. My retirement plan focuses on a variety of index funds with low fees now. I rolled my old 403(b) into a traditional IRA plan at Fidelity, where my Roth IRA was housed. My Roth IRA was in a targeted retirement plan then, meaning the investments would rebalance to become less aggressive as I neared retirement. Once I made the index funds switch for my IRAs, I got started on my husband's retirement accounts.

Persons: Roth, IRAs, Roth IRAs, that's, R.J, Weiss, It's Organizations: Service, Fidelity, Roth IRA Locations: Wall, Silicon, Minneapolis

☆ A millionaire couple in their 30s has 3 investing accounts set up for their 2-year-old daughter — and one for a baby on the way. Anyone can open one to help their kids get a head start on investing.
▼ + stars: | 2023-07-23 | by ( Kathleen Elkins | ) www.businessinsider.com time to read: +5 min

They have three investment accounts for their 2-year-old daughter, including a 529 plan. Insider reviewed screenshots of their investment accounts that showed these details. Brennan walked Insider through the investment accounts they've already opened for their kids. With a custodial Roth IRA, a "custodian" (usually a parent or grandparent) controls the Roth until the child reaches legal adulthood. While there are no age requirements to open a Roth IRA for a child, the child must have earned income.

Persons: Brennan, Erin Schlagbaum, Erin, Rowe Price, that's, Roth, she'll Organizations: Google, YouTube, IRS, Fidelity, Vanguard, IRA

In 2016, Mark Lemoine came home from work and told his wife Karla Lemoine he wanted to quit his job and buy a campground. The Lemoines put their house on the market, withdrew all their savings and "sold everything we owned to buy the campground" for $1.6 million, Mark says. Mark and Karla Lemoine sold their house, car and more to buy a campground in Benton Harbor, Michigan. It brought in $1.2 million in revenue last year, enough for the Lemoines to pay themselves a combined $150,000 in salary. The Lemoines had to get creative to pay for their dream $1.6 million campground.

Persons: Mark Lemoine, Karla Lemoine, Mark, Karla, they'd, Devin Lieberman, they've, Joseph KOA, Roth IRAs Organizations: CNBC, America Locations: Michigan, Benton Harbor , Michigan, Grand Rapids, Chicago, Coloma, St, Rockford , Michigan

Robinhood vs. Coinbase: The Biggest DifferencesRobinhood Investing and Coinbase are both popular online investment platforms offering a vast range of investment choices for active traders. Robinhood Account FeaturesRobinhood's virtual library provides a variety of financial research on investing, options trading, and more. Coinbase Account FeaturesThe Basic Coinbase account offers things like trading, crypto rewards, interest rewards, digital storage, and mobile access. Compared to Coinbase, Robinhood is the better option for investors who want to merge traditional investments, such as stocks and ETFs, with more digital assets like cryptocurrencies. Although Robinhood has a significantly more limited crypto selection than Coinbase, Robinhood offers a large variety of investment options.

Persons: Robinhood, Roth, Coinbase Coinbase, Roth IRAs, Coinbase, There's, Louis Oberlander, Henry Rodriguez, Christopher Underwood Organizations: Robinhood, Chevron, Reading Chevron, Coinbase, Trade, Pro, Morningstar, Nasdaq, Better, Bureau, BBB, Gamestop, SEC, Advanced Trade, Inc, New York State Department of Financial Services, New, DFS Locations: cryptocurrencies, New York, Robinhood

☆ New to investing? 'Run' to this tax-advantaged retirement account, says CFP
▼ + stars: | 2023-06-22 | by ( Ryan Ermey | ) www.cnbc.com time to read: +4 min

Some 28% of workers made Roth contributions in 2021, up from 18% in 2016, according to the Plan Sponsor Council of America. "Younger, mid- to lower-income employees should run to the Roth 401(k)," he says. Roth 401(k)s vs. Roth IRAsIf you're thinking the rules for Roth 401(k)s sound similar to those for Roth IRAs, you're right. Plus, you can contribute a lot more to a Roth 401(k) than a Roth IRA. For 2023, you can contribute up to $22,500 to a Roth 401(k), plus an extra $7,500 for those age 50 and up.

Persons: it's, you'll, Roth, you've, Jeremy Finger, Younger, you'd, Catherine Valega, Valega, Roth IRAs Organizations: of America, Riverbend Wealth Management Locations: America, Boston , Massachusetts

☆ 'It costs money to owe money': How to balance student loans and saving for retirement
▼ + stars: | 2023-06-15 | by ( Isabel Engel | In Isabel--Engel | ) www.cnbc.com time to read: +5 min

For those fresh out of college and newer to the workforce, it can be challenging to figure out how to balance between managing looming student loan debt and saving for your future. And after a three-year pause, federal student loans will resume accruing interest on Sept. 1, with payments coming due in October. "It costs money to owe money. Ultimately, the sooner you can pay off your student debt — by making minimum payments and paying a little more each month if you can — the less you will pay overall. "Start taking a little bit of money away that will cover two months' worth of your student loan debt and a couple of months' rent," he says.

Persons: —, Chris Briscoe, Gen Zers, Briscoe, Andrew Meadows, Meadows, Roth, Roth IRAs Organizations: Girard Advisory Services, CNBC, College, Savings Locations: United States

Kraken vs. Coinbase: The Biggest DifferencesCompare Kraken and Coinbase KrakenCoinbase Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. These levels determine which account features you can access, as well as represent the amount of documentation you provide when setting up your Kraken account. Kraken Account FeaturesIf you're an institution or an advanced trader, there's no shortage of services at Kraken. The standard Coinbase account includes crypto trading, Coinbase Earn, Coinbase Card (a Coinbase debit card), wallet services, and more. Coinbase and Kraken are both great cryptocurrency exchanges with large cryptocurrency selections, account features, NFT beta marketplaces, and more.

Persons: Coinbase, Min, webinars —, Kraken, Roth IRAs, Coinbase Waller, you'll Organizations: US Securities and Exchange Commission, SEC, Chevron, Coinbase, Trade, Pro, OTC, Better, Bureau, Inc, New York State Department of Financial Services, New, DFS, iOS Locations: New York, Washington

☆ The 'holy grail' of investing accounts: How IRAs can boost your retirement savings
▼ + stars: | 2023-04-26 | by ( Ryan Ermey | ) www.cnbc.com time to read: +5 min

Like workplace retirement accounts, such as 401(k)s, IRAs provide another way to save for retirement. And withdrawing money in retirement without owing any tax is the "holy grail," says Ed Slott, a certified public accountant and founder of IRAHelp.com. Roth IRAs offer no upfront deduction, because they're funded with money you've already paid taxes on. Plus, you can take out any of the money you've put in at any time without penalty. How do I open a Roth IRA?

☆ Why it's 'just no question' new investors should start by opening a Roth IRA, expert says
▼ + stars: | 2023-04-21 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

A Roth IRA allows investors who qualify to set aside after-tax money up to a certain limit each year. Who can invest in a Roth IRAImportantly, you can start contributing to a Roth IRA starting from any age if you have taxable compensation. In 2023, investors may put up to $6,500 in traditional or Roth IRAs (or $7,500 if they're 50 or older). The way you invest the money inside a Roth IRA account can be adjusted to suit your goals. What you choose to put in the Roth IRA can be either savings or investments.

☆ Want to open your first brokerage account? Follow these 4 easy steps
▼ + stars: | 2023-04-19 | by ( Ryan Ermey | ) www.cnbc.com time to read: +4 min

One thing worth considering on this front is where your workplace retirement account is held, if you have one. If you have a short-term goal, such as saving for a down payment on a home, you'll likely want to open a taxable brokerage account. If you're saving for a long-term goal, such as retirement, gravitate toward an individual retirement account. Step 3: Sign up and fund your accountOnce you decide on an account, you'll have to fill out an application. Generally, you can make a deposit by linking a bank account, ordering a wire transfer, cutting a check or transferring funds from another type of brokerage account.

☆ Trying to fund an individual retirement account ahead of the Tax Day deadline? Here's what you need to know
▼ + stars: | 2023-04-18 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

The deadline to make IRA contributions generally coincides with Tax Day. Some residents of eight states have federal tax deadline postponements until May, July or October due to natural disasters, according to the IRS. Roth IRA contributions, on the other hand, consist of post-tax contributions. You may be able to get around these restrictions through a Roth conversion, where traditional IRA funds are moved to a Roth IRA. While funding a Roth IRA may not immediately affect your tax circumstances now, experts say it may be the better pick in the long run.

☆ My younger sister asked me for money advice. Here are 5 answers I gave to improve her financial life
▼ + stars: | 2023-04-02 | by ( Annie Nova | ) www.cnbc.com time to read: +5 min

This cash should be in a high-yield savings account, offer higher-than-average returns, experts say. You can find an online savings account offering an interest rate of 3% or more, for example, while the typical savings account rate is around 0.4%. Make sure the savings account you choose is insured by the Federal Deposit Insurance Corp., which means up to $250,000 of your deposit is protected from loss. Where should I invest money? To get a better understanding of your spending, experts recommend looking back at your purchases over the past couple of months.

☆ Social Security trust funds depletion date moves one year earlier to 2034, Treasury says
▼ + stars: | 2023-03-31 | by ( Lorie Konish | ) www.cnbc.com time to read: +2 min

The Social Security trust funds that about 67 million Americans rely on for benefits are scheduled to be depleted in 2034, one year earlier than was projected last year, according to the annual trustees' report released by the Treasury Department on Friday. Unless Congress takes action, at that time, 80% of scheduled benefits will be payable from the combined funds for old age and survivors insurance and disability insurance. The new depletion date comes as the trustees updated their projections for the U.S. economy to include recent output and inflation. Meanwhile, Medicare's hospital insurance trust fund will be able to pay 100% of scheduled benefits until 2031, three years later than projected last year. The White House earlier this month laid out a plan to extend the solvency of Medicare's hospital insurance trust fund, also known as Medicare Part A, which covers hospital, nursing facility and hospice services for eligible beneficiaries.

☆ With a recession looming, it's an important time to have an emergency savings account, finance expert Suze Orman says
▼ + stars: | 2023-03-30 | by ( Lorie Konish | ) www.cnbc.com time to read: +5 min

watch now"There has never been a time that as much as right here and right now in the recent past that an emergency savings account is vital, absolutely vital," Orman said. In 2020, she co-founded SecureSave, a company working with employers to provide emergency savings accounts to employees. "If you go back through my entire history of almost 40 years now, I've been [saying] emergency savings, emergency savings, emergency savings," Orman said. How your emergency fund deposits are insuredAn important part of emergency savings is easy access, which means most people are looking at some kind of high-yield savings account. Generally, deposit accounts are eligible for $250,000 coverage for the sum of accounts at an institution in this category, which includes checking accounts, savings accounts, certificates of deposit or money market deposit accounts.

☆ Why you may be subsidizing a co-worker's 401(k) fees
▼ + stars: | 2023-03-29 | by ( Greg Iacurci | ) www.cnbc.com time to read: +1 min

Workers who participate in a company 401(k) plan pay fees for a host of associated services. But based on how your employer structures its retirement plan, you may unknowingly be subsidizing colleagues' 401(k) fees. The dynamic is a function of the investments you choose and how the 401(k) plan pays costs for administrative expenses. The overall cost of those funds may include a "revenue-sharing" fee (also known as a 12b-1 fee, a distribution fee or shareholder services fee, for example). The fund manager collects this fee and then passes it along to the 401(k) plan's administrator.

☆ 3 last-minute moves to lower your 2022 tax bill or boost your refund
▼ + stars: | 2023-03-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Getty ImagesThe tax deadline is approaching, and there are still a few ways to reduce your 2022 bill or boost your refund, experts say. However, there are a few last-minute moves to consider before the federal tax-filing deadline, which is April 18 for most Americans. However, you need to consider more than the current year's tax break before making pre-tax IRA contributions, Lucas said. Contribute to a spousal IRAMarried couples filing taxes jointly may also consider a lesser-known option before the tax-filing deadline: spousal IRA deposits. Collectively, annual spousal IRA deposits can't exceed joint taxable income or two times the yearly IRA limit.

A health savings account is a savings vehicle that lets you put aside money for health costs. Retirees over age 65 can use HSA money for non-health costs. What is a health savings account? An HSA can be another way to invest for your futureAn HSA can also be an investment account. You'll also want to check for potential fees related to an HSA account.

☆ The last chance for some retirees to avoid a 25% tax penalty is April 1
▼ + stars: | 2023-03-17 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

In 2022, Secure 2.0 raised the age to 73, which starts in 2023. RMDs apply to both pre-tax and Roth 401(k)s and other workplace plans, along with most individual retirement accounts. Secure 2.0 reduced the RMD penaltyIf you skip your RMD or don't take out enough, there's a 25% penalty, levied on the amount you should have withdrawn. Secure 2.0 dropped the penalty to 25% from 50% starting in 2023, with the possibility of reducing it further to 10% if you take your missed RMD during the "correction window." "In the past, the IRS was lenient about missed RMDs, but with the new reduced penalties, they may get more aggressive," he said.

Retirement saving for women can be difficult because of pay gaps and time out of the workforce. Lynnette Khalfani-Cox says women should start saving early; automate your savings to make it easy. Low annual fee for investment accounts; crypto trust investments available Check mark icon A check mark. "The way to combat this is to start saving as soon as you can." If you're using an employer-sponsored retirement account, your employer may have instructions on how to set up automatic transfers for yourself.

☆ Stocking up on income-paying assets? Here’s how to maximize their tax efficiency
▼ + stars: | 2023-03-04 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

The calculus of tax optimization Tax optimization begins with the three types of investment accounts available to investors: taxable brokerage accounts, tax-deferred accounts such as 401(k) plans and individual retirement accounts, and tax-free accounts like Roth IRAs. Tax-deferred accounts, meanwhile, allow money to accumulate free of taxes – but you're on the hook for income taxes when you take withdrawals. Your individual tax situation will also be a key factor in determining which income assets are best for you and where you should hold them. However, investors in a low tax bracket might be better off going for taxable bonds – which tend to pay higher yields than municipal bonds. Asset location Taxable brokerage accounts are generally a good place to hold T-bills if you're going to tap the money soon.

☆ Here's how much Americans have in their retirement accounts — and what it means for you
▼ + stars: | 2023-03-03 | by ( Elizabeth Gravier | Jason Stauffer | ) www.cnbc.com time to read: +8 min

Fidelity Investment's latest analysis of its retirement accounts reveals Americans have, on average, six-figure balances in their IRA and 401(k) retirement accounts. As of the fourth quarter of 2022, the average balances in an IRA, 401(k) and 403(b) were (respectively) $104,000, $103,900 and $92,683. Betterment Learn More Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn't require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Wealthfront Learn More Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected.

☆ Premarket stocks: Why today's inflation report is so important
▼ + stars: | 2023-02-24 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Recent data has shown that inflation is still hot, and that the economy is rip-roaring. On Thursday, JPMorgan Chase (JPM) CEO Jamie Dimon publicly expressed his doubt in the central bank’s ability to control inflation. This, in turn, can help make it easier for the central bank to achieve its inflation targets. Blackrock analysts wrote in a note Thursday that “we think we are going to be living with inflation. Watson was accused in a federal indictment of having “engaged in a scheme to defraud OZY’s investors, potential investors, potential acquirers, lenders and potential lenders.”The charges said that Watson committed the fraud “through material misrepresentations and omissions” about Ozy Media, including the company’s finances, investors, business partners, contracts, and potential acquisitions.

☆ 401(k) balances rise, despite economic challenges
▼ + stars: | 2023-02-23 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +3 min

That’s according to new data from Fidelity Investments, one of the largest providers of workplace retirement plans, which combined represent $2.8 trillion in assets on its platform. By that Barry means the average 401(k) savings rate (including both employee contributions and employer matches) held roughly steady at 13.7%, down from the 13.8% in the third quarter and 13.9% in the second quarter. Among generations in the workforce, Baby Boomers had the highest savings rate as a percent of their income (16.5%). But the average rate among this group is still very low – at just 2.6%. The average 401(k) balance in Fidelity-administered plans, meanwhile, rose 7% from the third quarter, to $103,900.

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