Getting Your Financial Ducks In A Row


 

Quick – what’s the earliest age you can withdraw money from a retirement account without paying a penalty? This is an even younger (and clever) answer, but still not the earliest age.

age answer employment exceptions IRA money penalty plan withdraw withdrawal

 

Establishing and contributing to an IRA (Traditional or Roth) is pretty simple and straightforward. There are many institutions where you can establish your IRA accounts: banks, savings and loans, credit unions, insurance companies, mutual fund companies, and brokerages.

banks choice companies cost institution insurance investment IRA mutual fund option

 

Although I will admit that the title of this post is a bit glamorous, I wanted to share the simplicity of the message.

Typically, every morning we will sit down to eat breakfast.

age answer asked money morning retire retirement save spend told

 

Most of us realize that donating money and goods to a charity can be beneficial on our tax returns.

When you do work for a charity, whether building houses, manning a recruitment booth, or picking up items donated, travel may be required.

charity costs expense expenses taxpayer qualified taxpayer taxpayer deduct travel trip volunteer

 

In other articles we’ve covered the Age 55 rule for 401k plans – where you’re allowed to withdraw money from your 401k penalty-free if you leave employment at or after age 55. But there’s a downside to the Age 55 rule that you need to know about.

age approximately IRA Married plan Steve tax withdraw withdrawal years

 

One of the requests we make when doing retirement or Social Security claiming plans for clients is for the clients to bring in their Social Security statements.

If you’re leery of giving your personal information online, you can go into your local Social Security office and verify your ID by showing a valid photo ID.

claiming clients online Paper request retirement retrieve security social statement

 

Note: it’s interesting to learn about IRA history in order to better understand why some provisions are the way they are. This IRA history is updated occasionally as new provisions are added.

act contribution distributions income IRA limit plan provision retirement tax

 

How to Save Even More [0.16]

Posted on July 14, 2017, 12:05 p.m. by Getting Your Financial Ducks In A Row @ [source]

Saving money via payroll deductions, automatic contributions to IRAs and 401ks, and directly into piggy banks (for kids and adults alike) can be considered ways to save money directly. However, there are some ways to save money indirectly – and convert that money into direct savings towards retirement, college, or other financial goals.

buying college directly food grocery items money saving spending ways

 

For certain types of workers, specifically someone employed as a public safety employee, there is a special exception to the normal distribution rules. Recent expansion of this definition was put in place to include federal employees who work in certain public safety professions.

age applies employee exception IRA penalty plan public safety retirement withdrawal

 

Many homeowners find themselves in a beneficial position a few or many years into their mortgage. Reverse mortgages allow homeowners to tap the equity in their home in order to supplement their retirement income.

argument equity home interest loan market money mortgage purchase vacation

 

If you’re contemplating hiring a financial planner or advisor or if you’re currently working with one, here are some fair and important questions you may consider asking him or her. Many advisors have designations and some will also have degrees specific to financial planning.

advisor asset commission conflict fee financial planning interest means paid questions

 

Social Security Survivor Benefits can be a critical lifeline for surviving spouses. There’s a lot written about the topic in Social Security’s POMS manual, but it becomes very simple after you study it a bit.

age benefit filing FRA future interaction Jack receive survivor survivor benefit

 

IRA or 529? [0.16]

Posted on June 12, 2017, 1:36 p.m. by Getting Your Financial Ducks In A Row @ [source]

After my post last week (Higher Education Expenses Paid From an IRA) I received a question from a reader: “If it’s possible to pay QHEE from an IRA then why would it be beneficial to contribute to a 529 specifically?” In today’s post I’ll cover the reasons you might choose an IRA or 529 plan.

As covered in the prior post, an IRA plan can be used in part to pay for college expenses.

contribution Education expenses funds IRA limit plan purpose tax withdrawal

 

I wanted to write a brief note on the difference between being frugal and frugal spending. Frugality, in my opinion, is making smart purchases when necessary, and forgoing purchasing altogether if not.

buying frugal item money sale saved simply spending store wasting

 

I wanted to write a brief note on the difference between being frugal and frugal spending. Frugality, in my opinion, is making smart purchases when necessary, and forgoing purchasing altogether if not.

buying frugal item money sale saved simply spending store wasting

 

Another way to pull funds from an IRA without having to pay the 10% penalty is to use those funds for Qualified Higher Education Expenses (QHEE). In this portion of the code, the provision is made for an IRA owner to withdraw, without penalty, amounts “not to exceed the Qualified Higher Education Expenses for the tax year”.

board Education expenses funds institution IRA QHEE room student tax

 

Throughout our lives we acquire things. It can also creep into our financial lives – as we acquire different savings accounts, retirement accounts, or purchase things that continue to be automatically deducted from our bank account (a monthly subscription to a gym, perhaps).

accounts focus item lives money retirement saving stuff subscription things

 

All is not lost, there are ways to deal with this situation that can be helpful if you can’t pay.

The most important part is to not ignore the situation, you need to take action and make arrangements.

Agreement Direct Pay ignore installment IRS pay payment tax taxes taxpayers

 

What’s the difference between the two types of IRAs? This discussion is liable to be useful as you consider which kind of IRA is best for you (and both could be best for you, at different times in your life).

age contribution deductible distributions income IRA non Roth tax Trad

 

When we hear the word audit it’s often associated with a negative connotation. However, an audit does not necessarily have to be a bad thing – especially when it can save you some money.

audit energy home improvements money saving utilities utility wasted water