Roth IRA Conversion and Contribution Rules - 277

Your Money, Your Wealth

Realestate, Income, Investing, Personalfinance, 401k, Rothconversion, Retirement, Education, Taxes, Socialsecurity, Personalfinances, Finance, Retirementplanning, Investments, Stocks, Business, Roth, Fiduciary, Ira

2.3 • 681 Ratings

🗓️ 9 June 2020

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

Roth IRA contributions and conversions come with plenty of rules: contribution rules, withdrawal rules, safe harbor rules, pro-rata and aggregation rules. In this episode, we explain these rules, and how they apply to both traditional retirement plans and accounts like SEP IRAs and thrift savings plans (TSP). Plus, understanding small-cap, mid-cap, large-cap, value, and growth asset classes when it comes to investing. Sign up for the exclusive YMYW live webinar on June 10, send in money questions and access the episode transcript and free financial resources in the podcast show notes: https://bit.ly/YMYW-277

Transcript

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0:00.0	If you're listening to this episode on the day it was released, congratulations. That means you still have time to register for tomorrow's live YMIW webinar happening at noon Pacific 3 p.m. Eastern. Once again, Joe and Big Al will be answering your money questions live on camera for free and just for YMYW listeners. Sign up in the podcast show notes. Click the link in the description of today's
0:21.1	episode in your podcast app to get there. Today on Your Money, Your Wealth, we're talking all about
0:26.8	Roth rules, contribution rules, withdrawal rules, safe harbor rules, pro rata and aggregation
0:31.9	rules. Joe and Big Al will explain them and how they apply to both traditional retirement plans
0:36.7	and to accounts like
0:37.8	SEP IRAs and Thrift Savings Plans.
0:40.3	Plus, the fellas break down the small cap, mid-cap, large-cap, value and growth asset classes.
0:46.0	And we wrap up with a giant derail about getting a haircut.
0:49.5	I'm producer Andy Last, and here are the hosts of Your Money, Your Wealth, Joe Anderson, CFP, and Big Al Glopine, CPA.
0:57.3	We got David from NYC.
1:00.1	He writes in, hi, all.
1:02.0	I have a question about Paine estimated federal income taxes in the safe harbor.
1:06.8	My situation is brief as he writes us a full page.
1:12.3	One, two, three, pair, guys.
1:15.8	I'm retired in getting Social Security, 85% of which is taxable, and my wife is still working.
1:22.6	With those two income streams, plus cap gains, dividend distributions, and interest minus deductions, our taxable
1:29.1	income was about $130,000, so we're in the 22% tax bracket. For 2020, because during the first
1:37.3	three months of this year, I did a little over $20,000 conversion, almost awfully taxable due to the pro rata rule. And because I expect much
1:47.0	larger capital gain distributions from some actively managed mutual funds in our taxable
1:52.2	account, thanks to the volatility this year and the ongoing outflows, our taxable income
1:56.8	should end up just about at the top of the 22% tax bracket or a tiny bit above at 171,000
2:05.5	in some change.
	...

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