Terms of Use The IRS uses MAGI to determine if any or all of your IRA contribution is deductible and if you are eligible for premium tax credits. The higher your MAGI, the fewer deductions you can take on IRA contributions. There is a maximum MAGI when if met, IRA deductions aren't allowed. While you can still contribute to an IRA, but you won't be able to deduct any of the contributions on your tax return. Adjusted Gross Income (AGI) AGI represents your taxable income. AGI is defined   More...

Terms of Use IRAs are a great way for you to save for the future. Your IRA can consist of a range of investments from savings accounts, stocks, bonds, and certificates of deposit or share certificates. You can contribute up to a certain limit each year into your IRA and if you're over 50, you are allowed an additional catch up contribution. The tax advantages of a Traditional or Roth IRA depend on your annual income and whether you are covered by your company's retirement plan. B  More...

Terms of Use What is a Roth IRA? The purpose of a Roth IRA is to put away money for retirement. To be classified a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. An IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. Roth IRAs are funded with after-tax dollars; the contributions are not tax deductible but qualified distributions are tax-free. You may be able to take a Saver's Tax Credit of 10% to 50% of the co  More...

Terms of Use Definition: A 401(k) plan is offered by employers to allow you to set aside money for retirement on a tax-advantaged basis. You can contribute pre-tax dollars and then invest those dollars in the investment options provided by your employer for the purpose of saving for retirement. The earnings on your investments are tax-deferred until retirement. Your employer may also make matching contributions to your account. 401(k) plan limits: 401(k) Plan Limits 2023 Elective Deferrals $  More...

Terms of Use Withdrawals are allowed from your 401(k) plan if they are considered to be a hardship withdrawal, and they are allowed by the employer. Employers are not required to provide for hardship withdrawals. The IRS code that governs 401(k) plans provides for hardship withdrawals only if: The withdrawal is due to an immediate and heavy financial need; The withdrawal must be necessary to satisfy that need (i.e. you have no other funds or way to meet the need); The withdrawal must not e  More...

Terms of Use What is a 403(b)? A 403(b) is an employer sponsored retirement savings plan that allows you to save pre-tax dollars for your retirement. A Roth 403(b) permits only after-tax contributions but allows you to diversify your tax risk by letting eligible participants make tax-free withdrawals after retirement. The IRS limits the amount you can contribute each year In 2023: You can contribute up to $22,500. This limit is applicable if you're under age 50 as of December 31st (refer  More...

Terms of Use An IRA is an Individual Retirement Account that provides several tax benefits . IRA accounts can be comprised of fixed income instruments, such as CDs/share certificates, bonds, stocks and mutual funds, to name just a few options. A Traditional IRA enables individuals to save money in a tax-deferred account. What that means is that the earnings from your IRA account will not be taxed until you begin taking money out of the account. Traditional IRA Snapshot Contributions: Tax-dedu  More...

Terms of Use A rollover is when you withdraw funds from an IRA or plan, and you contribute those funds to the same or another IRA or plan. A trustee-to-trustee transfer (often called a direct transfer or direct rollover) is when you never receive the IRA or plan funds. They are transferred directly from one financial institution to another without you ever touching the money. The general rule is that when you take a distribution from an IRA (or other tax-deferred retirement account) that y  More...

Terms of Use There is no legal distinction between a conversion Roth IRA and a regular Roth IRA, both are simply Roth IRAs. A conversion Roth IRA refers to a Roth IRA that receives money from Traditional IRAs through a conversion, rollover or direct transfer. If an account is designated as a conversion Roth IRA, then that account can only accept IRA conversion contributions made in a single year. A separate conversion Roth IRA must be established each year in which an individual desires to c  More...

Terms of Use People often associate trust funds only with the wealthy. But a trust fund ( trust ) actually can be an effective financial tool for many people in many circumstances. A trust is a separate legal entity that holds property or assets of some kind for the benefit of a specific person, group of people or organization known as the beneficiary ( beneficiaries ). The person creating a trust is called the grantor , donor or settlor . When a trust is established, an individual or corporate   More...