Life has kept you so busy you’ve had no time to think about the goals you made 17 years ago when your first child was born. So what do you do now?
It is your money in that IRA, but you may have to pay a penalty to get at it.
A Roth IRA is my favorite way to save for retirement. You use after-tax dollars to make your contributions and when you withdraw the funds you will not owe income tax, including the money the Roth has earned.
A Spousal IRA is used for an unemployed or underemployed spouse.
A Rollover IRA allows you to receive distributions from qualified retirement plans and not pay tax on the distribution.
These plans were designed to help individuals not covered by retirement plans at work and to give those individuals changing jobs the ability to rollover retirement assets and retain the tax deferred status.
Congress and the IRS decided that you cannot leave your pre-tax retirement savings growing forever tax-deferred, so they chose 70½ for you to begin mandatory withdrawals.
Congress increased the amount workers could contribute to their retirement plans but then realized that older workers closer to retirement were in rough shape.
Mid-year is a good time to take stock of your retirement accounts.
If you haven’t planned well for retirement you may find yourself coming up short.