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☆ What the new 401(k) limits and other changes mean for your retirement
▼ + stars: | 2024-11-01 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

The new contribution limit for 401(k)s and other workplace retirement plans in 2025 will be $23,500, up from $23,000 currently, the Internal Revenue Service said Friday. The catch-up contribution limit will remain the same at $7,500. Now for an ounce of reality: Most people do not max out their 401(k) savings, whatever their applicable contribution limit. Higher income thresholds for IRAsThe IRS did not increase the contribution limits for individual retirement accounts, known as IRAs. If you’re married and filing jointly and you personally are covered by a workplace retirement plan, your joint modified AGI must not exceed $146,000, up from $143,000.

Persons: CNN —, —, “, Roth IRAs, Roth, you’re Organizations: CNN, Internal Revenue Service, IRS, Vanguard, America, Social, Fidelity

☆ Op-ed: Your kids need a Roth IRA. It's the 'golden egg' savings vehicle for young people
▼ + stars: | 2024-09-29 | by ( Winnie Sun | ) www.cnbc.com time to read: +4 min

How a Roth IRA for kids worksYes, kids can have their own Roth IRA — and, just like for adults, the IRS rules are pretty straightforward. There's no minimum age requirement for contributing to a Roth IRA; if a child can earn money, they can have a Roth IRA. watch nowMore about those income requirements: To contribute to a Roth IRA, the child must have earned income. Why I like the Roth IRA for youngstersI think of the Roth IRA as the "golden egg" savings vehicle for young people because not only is the account tax-sheltered, it also has the beneﬁt of liquidity. Establishing a Roth IRA for youngsters is a powerful way to set them on the path to financial security.

Persons: Roth Organizations: Roth IRA, IRS, Social Security

☆ The generation that may never retire: Why some millennials are behind on savings — and how they can catch up
▼ + stars: | 2024-05-29 | by ( Jacob Zinkula | William Edwards | ) www.businessinsider.com time to read: +14 min

However, the average millennial reported roughly $63,000 in retirement savings so far. While millennials will need more money to retire comfortably, many are far away from the savings milestone experts suggest. What's more, the future of the US Social Security system is uncertain, and longer expected lifespans — while a positive development — will require more retirement savings. How to figure out how much retirement savings you needTiffany Bell, a 36-year-old business management professional based in Houston, didn't always take retirement savings seriously. How millennials can get their retirement savings back on trackWhile some millennials are struggling financially, it's not all doom and gloom when it comes to their retirement prospects.

Persons: Nathaniel Hudson, Hartman, millennials, Tiffany Bell, didn't, Bell, she's, they're, Chris Chen, Chen, Judi Leahy, it's, Leahy, NerdWallet, Bell —, —, X, What's, Nilay Gandhi, Roth, Rita Assaf, Assaf, Gandhi Organizations: Business, Northwestern Mutual, Pew, US Social Security, Fidelity, Financial, Citi, Wealth Management, Vanguard, Big, CFP, Roth IRA, Fidelity Investments, Savings, Hudson Locations: Portland, Houston, New York, Montana

☆ I saved $100,000 by 25 thanks to the good financial habits my mom and dad gave me. Here are my top tricks.
▼ + stars: | 2024-04-05 | by ( Aleenah Ansari | ) www.businessinsider.com time to read: +5 min

Money gave me the freedom to leave a toxic job, travel to Europe, and launch my career as a financial advisor. When I set out to save $100,000, I was 22, living in Seattle in 2016 and making $55,000 at my first corporate job. Saving $100,000 was a combination of privilege and hard work. I felt confident I could launch a successful financial education platform and take my financial education business, "Her First $100k," full-time. I wouldn't have hit my $100,000 goal as quickly if I hadn't routinely invested in these accounts.

Persons: Tori Dunlap, Roth, there's Organizations: Service, Business Locations: Seattle, Europe, Costa Rica

☆ The average tax refund is $3,109. Here's where to save and invest your return right now.
▼ + stars: | 2024-03-28 | by ( Kathleen Elkins | ) www.businessinsider.com time to read: +5 min

"The goal is usually to be as close to zero as possible: either a minimal return refund or a minimal tax payment. Where to save your money right now: high-yield or money market accountsOnce you've received your refund, a good initial step is to send that money from your checking account to a savings account. A few key differences: Your cash will be more accessible in a money market account, as you can write checks and use a debit card linked directly to the account. Note that money market accounts usually have a higher minimum balance requirement, ranging from a few hundred to a few thousand dollars. Interest rates are expected to drop in 2024, but you'll still earn more in these accounts than in traditional savings accounts, which typically offer rates under 0.5%.

Persons: Grant Nieland, you've, you'll, You'll, Roth, Nieland, we're Organizations: Business, Carson Wealth, IRS, Wealth, Roth IRA

High-yield savings accounts have seen huge APYs in recent times, but those rates may not last forever. Earn top savings rates and manage it all with a single secure login. But when should you ease up on your savings accounts and consider investing your money instead? That can make investing much more attractive than a savings account — even in a high-yield savings account — if you have a longer time horizon. Alternatives to HYSAsYou don't have to decide between a savings account and investing in a retirement savings account — like a 401(k) or an IRA — or a taxable brokerage.

Persons: —, Banks, Laura Mattia, Steve Oniya, Oniya, Tony Corsino, Mattia, you'd Organizations: Treasury, Service, Federal Reserve, Advisors, OM Investments, Zen Financial

Now that I'm stepping away from an employer-sponsored retirement plan, I need to save for my future on my own. Anjali Jariwala, the founder of financial planning firm FIT Advisors, says the most important aspect of planning contributions is setting good financial habits. Consider an IRANow that I'll be saving for retirement without the help of my employer, I'll want to consider an IRA. Consider a solo 401(k)I can also consider a solo 401(k), which provides similar benefits to an employer 401(k). And you can open up multiple retirement accounts, but keep track of your contributions and limits.

Persons: I've, it's, —, Anna Sergunina, Sergunina, Anjali Jariwala, Jariwala, Roth, Tricia Rosen, Robinhood, Rosen, Wealthfront, Read Organizations: Roth IRA

☆ Feds pave the way for cities and nonprofits to get climate-bill tax credits
▼ + stars: | 2023-06-14 | by ( Catherine Clifford | In Catclifford | ) www.cnbc.com time to read: +5 min

"For the first time, tax-exempt entities will be able to receive a payment equal to the full value of the tax credit for building qualifying clean energy projects," Podesta said. "That's a game-changer for our ability to spread the benefits of clean energy to every community in America." "The Inflation Reduction Act's biggest tools are tax credits, which provide an unprecedent 10 years of policy certainty for the clean energy sector," Podesta said. Conventionally, states, territories, tribes, local governments and nonprofits have not been not eligible for tax credits, because they do not derive profits from which to deduct the value of a tax credit. Taken together, the two bits of guidance stand to grease the flywheel of climate tech investment already being spurred by the Inflation Reduction Act.

Persons: Podesta, John Podesta, Joe Biden, what's, Wally Adeyemo, Adeyemo, Michelle Moore, Moore Organizations: US Department of Energy, U.S . Department of, Treasury, Internal Revenue Service, Biden, Washington DC, White, IRS, of, Washington , D.C Locations: Medicine Bow , Wyoming, America, Washington, USA, Washington ,, U.S, Baltimore, of Refuge, , Maryland , Illinois, Georgia, New York

☆ This last-minute move could cut your tax bill—but also cost you thousands as an investor
▼ + stars: | 2023-03-31 | by ( Ryan Ermey | ) www.cnbc.com time to read: +2 min

And in some cases, for tax purposes, the government is happy to let you put things off. You still have until Tax Day — April 18 this year — to make contributions to a traditional or Roth individual retirement account for tax year 2022. Each year, you have about a 16-month window to invest in an IRA — from January 1 until Tax Day the following calendar year. After 10 years, the January investor's portfolio would be worth about $6,500 more than the April investor. The January investor will have amassed about $358,000, compared with about $319,000 for the April investor.

☆ Roth provisions in Secure 2.0: What you should know
▼ + stars: | 2023-02-13 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

How Secure 2.0 broadens accessHere are four key Roth-related changes in the new retirement law. Catch-up contributions for high earners: If you’re at least 50 and max out your contributions to your 401(k), you will be permitted to save an additional $7,500 in catch-up contributions. SIMPLE and SEP IRAs: Both SEP IRAs and SIMPLE IRAs — which are used by small businesses — are now permitted to be designated as Roth IRAs if a small business owner chooses. The only way to remedy that is to roll your Roth 401(k) money into a Roth IRA. But, starting in 2024, your Roth 401(k) will no longer be subject to required minimum distribution rules.

☆ Secure 2.0 changes 3 key rules around required withdrawals from retirement accounts
▼ + stars: | 2023-01-03 | by ( Greg Iacurci | ) www.cnbc.com time to read: +2 min

President Joe Biden signed a $1.7 trillion legislative package on Dec. 29, 2022 that has several updates for retirement savers. Raising the RMD age to 73 (and eventually 75)Currently, savers have to start taking RMDs at age 72. The new law raises the RMD starting age in two tranches: to 73, starting in 2023, and to 75, starting in 2033. Eliminating RMDs from a Roth 401(k)Starting in 2024, investors in employer retirement plans likes Roth 401(k) accounts will no longer have to take RMDs. This change aligns Roth 401(k) with Roth IRAs, which don't require distributions during one's lifetime.

☆ Families can make a tax-free rollover from 529 plans to Roth individual retirement accounts starting in 2024
▼ + stars: | 2022-12-23 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

Maskot | Maskot | Getty ImagesMillions of 529 accounts hold billions in savingsThere were nearly 15 million 529 accounts at the end of last year, holding a total $480 billion, according to the Investment Company Institute. watch nowHowever, that investment growth is generally subject to income tax and a 10% tax penalty if used for an ineligible expense. A transfer would skirt income tax and penalties; investments would keep growing tax-free in a Roth account, and future retirement withdrawals would also be tax-free. The rollover can only be made to the beneficiary's Roth IRA — not that of the account owner. Some education savings experts think 529 accounts have adequate flexibility so as not to deter families from using them.

☆ Germany says borrowing more money to compete with the U.S. would be a 'threat' to Europe
▼ + stars: | 2022-12-06 | by ( Silvia Amaro | ) www.cnbc.com time to read: +2 min

BRUSSELS — Germany said Europe should refrain from borrowing more money to compete with U.S. green subsidies or its competitiveness will be threatened. European Commission President Ursula von der Leyen said Sunday "new and additional funding at the EU level" will be needed to make European companies more competitive in the transition to a greener economy. "There are some parts of Ursula von der Leyen initiative which [need] to be further debated, especially her proposal of [a] European sovereignty fund. However, they indicate where the commission believes the bloc should go to be in a better position to compete with the United States. "We have all heard the stories of producers that are considering to relocate future investment from Europe to the U.S.," von der Leyen said Sunday.

☆ This individual retirement account deduction mistake may derail your tax break
▼ + stars: | 2022-11-04 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

As the year-end approaches, you may be looking for ways to lower your 2022 tax bill — and certain tax-saving moves have rules you must follow in order to qualify. One option, adding money to your pretax individual retirement account, may be attractive if you make too much for Roth IRA deposits, and want to lower your adjusted gross income. For 2022, you can save up to $6,000 or $7,000 if you're 50 or older, as long as you've made at least that much from a job or self-employment. "Anyone can contribute to a traditional IRA — you, me, Jeff Bezos," said certified financial planner Howard Pressman, partner at Egan, Berger & Weiner in Vienna, Virginia. But the ability to write off IRA contributions depends on two factors: participation in workplace retirement plans and income, he said.

She pays each of her four children up to $500 a month to do small tasks around her office. She deposits half their paycheck into a custodial Roth IRA, where the money could grow to millions. Diop's financial planner helped her move out of her mom's house and set her children up to become millionaires by age 30 using two simple steps. She uses a custodial Roth IRA, an investment account where kids can invest their earned income for retirement. She opened a kid's debit card with Green Light, a company that creates checking accounts for children and teens.

How you can start buying stocks today401(k) or IRA A common method for everyday investors to put aside their money is by using either a 401(k) or an individual retirement account (IRA). Fidelity Investments Learn More Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected. Vanguard 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 On Wealthfront's secure site Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected.

A self-directed IRA (SDIRA) is a kind of retirement account that allows you to invest in assets that are off-limits to regular IRAs. You directly manage your self-directed IRA, and so are responsible for researching your investments and their tax consequences. If that sounds like you, a self-directed IRA (SDIRA) might be worth a closer look. Self-directed IRAs (SDIRAs) are structured like standard IRAs, with the same contribution limits, distribution rules, and tax advantages. That's not always the case with SDIRA assets, and your capital could be tied up in assets you no longer want.

I asked financial advisors to share common setbacks to gaining a 7-figure net worth they've seen. Ignoring the backdoor Roth IRA option and being too risky with investments can set you back. That's why I asked some of the best financial advisors to share what the biggest setbacks they've seen clients experience trying to make it to that level. Advertisement"A Mega Backdoor Roth IRA allows high-income taxpayers to create a permanently tax-free Roth IRA, even if their incomes exceed the amount for traditional Roth ownership," said Colvert. "The last thing you want is an accident to put your hard-earned net worth at risk."

Persons: Roth, —, I've, Brian Colvert, Colvert, Billy Mondor, Mondor, Jay Zigmont, Christy Matzen, Matzen Organizations: Service, IRA, Roth

Whether you're self-employed or your employer doesn't offer one, 401(k) plans simply aren't available to everyone. According to financial planners, there are several ways you can keep saving or start saving, even without a 401(k) plan. Financial planner Kenneth Chavis IV of Lourd Murray recommends a Roth IRA for many people who are just starting to save. If you're self-employed, consider a solo 401(k)When you're self-employed, a solo 401(k) should be the first place to go, financial planners say. Advertisement"That's actually one of the best retirement savings vehicles there is if you know how to use it," said financial planner Brian Bruggeman of Baker Boyer Bank.

Persons: Roth, —, Kenneth Chavis IV, Lourd Murray, Chavis, Brian Bruggeman Organizations: Service, IRA, Baker Boyer Bank Locations: Baker

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