What the Pro-Rata Rule Means for Your Backdoor Roth IRA

backdoor Roth IRA Pro-data rule

The backdoor Roth IRA pro-rata rule is a little known but highly important regulation that can have significant implications for anyone executing a backdoor Roth IRA conversion. It stipulates how the IRS will treat pre-tax and after-tax contributions when the taxpayer executes a Roth conversion. Creating an individual retirement account (IRA) is one of the […]

IRA Aggregation Rule and Implications for Your Backdoor Roth Conversion

Tax savings for Roth Conversions

Unlike traditional IRAs or 401(k) accounts, the Roth IRA is funded with after-tax dollars and the investments in the vehicle grow completely tax free. Not only that, but since Roth IRA principal balances have already been taxed, they can be withdrawn tax-free at any time. Roth IRAs have certain limits. You can only contribute $6,000 […]

Mega Backdoor Roth IRA Conversion

Roth IRA conversion for retirement

A Roth IRA is one of the most popular retirement savings vehicles in America and for good reason. Unlike the traditional IRA or 401(k) plan, Roth vehicles are funded with after-tax dollars and investment growth is tax-free. When you put money into a traditional IRA, you’re taking a tax break now and agreeing to pay […]

Three Steps to Execute a Backdoor Roth IRA

3 Steps to backdoor Roth

A Roth IRA is an excellent way for people to save for their retirement and not have to worry about paying additional taxes in the future. However, it is directly accessible to only a handful of savers. Those who earn above the income limit must execute a backdoor Roth IRA in order to enjoy the […]

Roth IRA Rollover Methods

examining Roth IRA rollovers

The Roth IRA is one of the most useful retirement vehicles available, but many retirement savers don’t start with one as their first account. A traditional IRA or 401(k) are the primary retirement vehicles for many Americans, providing tax-deferred savings on contributions. If you contribute to your IRA or 401(k), you can write off the […]

Backdoor Roth Taxes: What You Should Consider

roth IRA and taxes

When it comes to creating a backdoor Roth, the first thing many people take into consideration is backdoor Roth taxes – and rightly so. There are many instances in which an individual might want to open a Roth IRA. These accounts come with a host of perks, including the opportunity to withdraw funds tax-free. However, […]

Don’t Overlook This Loophole When Tax Planning in Retirement

retirement tax planning

A realtor will always tell you it’s a great time to sell your home, but in this current environment, they may actually be correct. The housing market is on fire lately and homes are being snatched up well above asking price. With interest rates expected to remain low for the foreseeable future, sellers should have […]

Required Minimum Distributions (RMDs) and Your Retirement Tax Planning Strategy

older couple reviewing tax documents

One factor that retirees too often overlook when tax planning in retirement is the legislation surrounding Required Minimum Distributions (RMDs). When you retire, you must consider the pace at which you draw down your retirement accounts in order to give your savings the best chance of outlasting your retirement. Included in this consideration are questions […]

5 Strategies to Manage Your Tax Bracket in Retirement

retiree calculating retirement income taxes

In retirement, as in your working years, it is critical to manage your tax bracket through careful tax planning in order to maximize your income. But when you’re tapping a finite nest egg in retirement, saving every possible dollar becomes even more important. In 2021, there are seven tax brackets, with the highest rate of […]

Understand How Your Retirement Assets Are Taxed

tax filing documents

Too many people overlook one big factor in planning for retirement – tax planning. When you think about retirement, you’re probably daydreaming about how you’ll spend your newfound free time and strategizing about saving to get to those goals. However, saving isn’t the only ingredient in the recipe for retirement success. Incorporating tax planning into […]