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.

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In most cases, the confusion could be cleared up by asking a simple question. She could then take her $66,000 in investment gains and steer those funds to a traditional IRA.

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How to Best Leave an IRA to Charity [0.16]

Posted on Aug. 12, 2017, 11 a.m. by Morningstar Articles @ [source]

Some of the charities are big and some are small churches or 501(c)(3)s. It would make sense to fund the charities' shares with the retirement benefit asset (the IRA) because the charities will pay no income tax on the IRA proceeds, whereas if the individuals' shares are funded with IRA assets their net inheritance will be reduced by income taxes. The client dies and then the charities find out, but the IRA provider won't simply issue the charities a check upon presentation of proper identification and Form W-9.

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Q: Are all of my retirement funds tied up until I'm 59 1/2 years old, or are there ways to access my money early?

You can take a withdrawal from your retirement account whenever you want, but you can get hit with a 10% early withdrawal penalty from the IRS unless you qualify for an exception.

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When's the Right Time to Take RMDs? [0.08]

Posted on Aug. 10, 2017, 11 a.m. by Morningstar Articles @ [source]

If you're past age 70 1/2, those withdrawals have to start coming out of your tax-sheltered retirement accounts--traditional IRAs and 401(k)s, as well as Roth 401(k)s--in the year following the year in which you attain age 70 1/2. Just as IRA contributors would do well to make their contributions as early in the year as possible, the better to take advantage of tax-deferred compounding over their lifetimes, RMD-subject investors can enjoy extra tax-deferred compounding benefits by delaying their withdrawals.

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The Great Recession had quite an impact on everyone, but it seems to have made a particularly deep impression on Millennials. Sure, the stock market is guaranteed to take some deep dives during your lifetime, but since you don't need to touch the money for decades, that won't matter.

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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.

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Some people shy away from annuities because compared to other investment options, they can be complicated and difficult to understand.

Now there are a few exceptions to this rule, such as if you happen to become permanently disabled or, worse yet, pass away, but generally speaking, it's a bad idea to touch your annuity before reaching 59-1/2.

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Financial advisor and SA contributor Adam Hoffman, CFA explains how Backdoor Roth IRAs can maximize after-tax outcomes. But his article and sophisticated number-crunching serve as a reminder that some financial decisions are complex enough to benefit from the advice of a professional.

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Switching jobs? Don't forget that 401(k) plan [0.31]

Posted on July 27, 2017, 2:01 p.m. by Investing @ [source]

An additional benefit is not being required to pay taxes when moving into an IRA since both 401(k) plans and IRAs are funded with pre-tax dollars, Bera said. Financial advisors suggest that getting a direct rollover could be ideal and to ask the human resources department at your new job for additional guidance and paper work for a seamless transition.

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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.

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We pay good money to estate-planning attorneys to draft trusts and wills. A transfer on death registration allows you to transfer such accounts to another individual upon your death, allowing the assets to avoid probate; a similar registration type--payable on death is available for bank accounts.

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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.

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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.

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3 Dumb Roth IRA Moves [0.12]

Posted on July 9, 2017, 1:43 a.m. by Latest Articles in Stocks @ [source]

There's no other retirement account quite like the Roth IRA . By avoiding bad moves like the ones below, you can take full advantage of Roth IRAs without losing any of the advantages they offer to retirement savers.

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You've probably heard by now that our country is deep in the throes of a retirement crisis. With more than 40% of baby boomers nearing retirement having no savings to show for whatsoever, it's clear that a frightening number of adults are banking -- erroneously -- on Social Security to pick up the slack.

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Though some workers neglect to save for retirement because they're unwilling to part with a portion of their earnings, for others, the decision not to save boils down to confusion and misinformation. In fact, though IRAs are one of the most convenient retirement savings tools out there, many folks don't open IRAs because they don't understand how they work.

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3 Smart Tax Moves [0.19]

Posted on June 18, 2017, 1:20 p.m. by Latest Articles in Stocks @ [source]

Taxes are unavoidable, but they're not unmanageable. Don't base your selling decision solely on taxes, but know that most of us face long-term capital gains tax rates (for qualifying assets that were held at least a year and a day) of 15%.

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You've crunched the numbers and determined that in order to retire on schedule, you've got to kick up your retirement-plan contributions. So, you've dutifully been making the maximum allowable company retirement plan and IRA deposits, and you've even begun saving for retirement in your taxable brokerage account.

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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.

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