Learn the facts about an IRA rollover and avoid some common mistakes. There are subtle differences between a rollover IRA and an account that has been funded using a transfer, but the terms are sometimes used interchangeably. If you become confused by the details and make a mistake, the account could lose its tax-free or tax-deferred status. Let me try to help you avoid that.
You as the Middleman
With an IRA rollover, you might think of yourself as the amiddlemana, since a check is made out to you and you must find a new custodian within 60 days. Otherwise, you will pay taxes on the fund.
In some cases, your current custodian may be required to withhold at least 20% of the fund for tax purposes. But, if you make a transfer, instead of a rollover IRA transaction, you are not the middle man and you don’t have to worry about taxes.
How to Compare Custodial Companies
If you are about to make an IRA rollover, it’s time to compare custodial companies. They charge different fees and offer different investment options. Sometimes, the fees that they charge can inhibit your ability to grow the account to its full potential.
Limiting your investment options also limits your ability to grow the account. So, when you are thinking about a rollover IRA, you need to do a little ashoppinga. Compare the fees that companies charge, as well as the investment choices that they offer.
What Investments Are Allowed
Under the current tax laws, you are allowed to invest in public and private stocks, residential and commercial real estate, bonds, treasury notes and bank certificates of deposit, as well as lesser known vehicles, such as tax liens, judgments, lottery winnings and mortgage notes. Most custodians do not offer all of these options for a rollover IRA. The majority of the accounts are invested in mutual funds, created by the custodial company.
An IRA rollover is safer and can earn more when it is fully diversified. Many people think of diversification as investing in different areas of the stock market. But, complete diversification includes all of the markets; real estate, stocks and money.
The Numbers Game
There are anumbersa that you need to consider when deciding which markets to invest in and how heavily. Bonds, treasury notes and CDs are considered risk-free investments, because they are guaranteed by the federal government, but a rollover IRA will earn a maximum of 4% on these investments. The inflation rate is expected to exceed 5% per year over the next twenty years. You need to consider that, because it means that your money will have less buying power in twenty years.
If your expenses remain the same and you hope to retire in 20 years, you will need twice the money to cover the same expenses. If your expenses are higher, then of course you will need more. Stock market returns rarely exceed 8%, but returns in the real estate market are unlimited.
If you make the right choices today, an IRA rollover can secure your future and your ability to retire, in style. Good luck!
If you are interested in investing in real estate in your IRA, but would like a simpler more TURNKEY solution, click on the url at the foot of this article, this will take you to my website. You will find much more enlightening information there.
Frequently Asked Questions
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QUESTION:
Does anyone have information on which banks permit rollovers of decedent’s individual retirement accounts?
Having a hard time finding a bank to accept a rollover of a decedent’s IRA (individual retirement account); does anyone know of such a bank or other financial institution that will accept the rollover?-
ANSWER:
IRAs are among the largest assets left to heirs and beneficiaries, and deciding what to do with an inherited IRA is among the most important decisions facing many heirs. So, let’s discuss the decisions you’ll want to ponder if you find yourself on the receiving end of an IRA account from a loved one who has passed away.
You can, of course, elect to receive the entire balance immediately in a total distribution. But, unless you need the money immediately, it’s generally better to leave it in the IRA as long as possible to defer taxation and prolong the period of tax-deferred growth.
Did you even know that you have choices if you are the beneficiary of an IRA account? The IRA distribution options available generally depend on whether the IRA owner dies before or after April 1st of the year following the year in which he or she turned age 70 1/2. That’s when the owner would have been required to start taking minimum distributions from the account. We’ll refer to that date as the “required beginning date.”
If the IRA owner didn’t name a beneficiary or named his estate as beneficiary, there is little room for distribution planning. If the IRA owner dies before the required beginning date, the balance will be distributed to his estate (or other beneficiary, as prescribed in the will) according to the five-year rule.
The five-year rule basically requires that the entire amount in the IRA be distributed no later than December 31st of the fifth year after the IRA owner’s death. In this case, the only question is when and how to take the distributions during the five-year period. Waiting until the end maximizes the tax deferral, but spreading distributions out over all years avoids bunching income for the recipient.
On the other hand, if the IRA owner dies after the required beginning date, the balance must be distributed over the remaining term elected by the IRA owner. Or, if the owner elected to recalculate his life expectancy, the balance must be distributed by the end of the year following the year of his death.If you inherit an IRA account, you’ll likely need some help to review your options from a qualified tax and/or financial professional with experience in this area of the tax code. Taking a “do-it-yourself” approach really might not be in your best interests. You may overlook or not completely understand some of the options available to you. Or worse, you could make the wrong decision and end up paying unnecessary tax dollars to Uncle Sammy. So, use the information above as nothing more than a starting point, and then do the additional research required to see exactly where you stand. You can find additional information on your available options in IRS Publication 590.
Sorry so long , but this is a complicated issue
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QUESTION:
Is the current financial crisis a threat to the security of my Individual Retirement Accounts at Fidelity?
How is Fidelity different than Bear Stearns that just collapsed? What kind of exposure, if any, does Fidelity have to mortgage backed securities? If Fidelity were to go bankrupt, what would happen to all the money in my retirement accounts there?-
ANSWER:
Fidelity is not an investment bank – it is a mutual fund manager and broker. Even if Fidelity, the funds management/brokerage company, went bankrupt, the mutual assets themselves (stocks, bonds, cash) are held in segregated accounts.
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QUESTION:
What Happens When Republicans Force Us To Buy Individual Retirement Accounts If The Health Care Law Is Legal?
If Obama successfully defends the Health Care Law in the supreme court, then that Precedent is set for the Government to require you to purchase other things in the interest of the protecting the masses. So if your for health care, are you ready to make other purchases when the republicans follow up on that precedent down the road when they have control?-
ANSWER:
Liberal response: But, but, but….. THAT would be UNconstitutional!!! HA!
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QUESTION:
Where will the Obama Admin. get the matching funds to give people who take Auto Individual Retirement Accounts?
The Government is borrowing every dime they spend now because of the Super Inflated National Debt. Who or What country is going to pick up this debt? How is it going to be funded?-
ANSWER:
Same palce they’ve always gone to get it – at the mint, printing worthless dollars on paper back by Communist China’s buying our bonds.
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QUESTION:
Are Individual Retirement Accounts immune to divorce and other civil judgments and liens?-
ANSWER:
401ks ( being contributed into while married are not immune to divorce)
depending on how long the person is married- pensions are not safe either
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QUESTION:
Would Liberals Like To See President Obama Take Over Individual 401k Retirement Accounts?
There’s an awful lot of money just sitting in people’s retirement accounts that President Obama wants the Federal government to control. Would liberals like to see President Obama seize 401k retirement accounts? How will government control of everyone’s retirement account help Americans?
Liberals Bias, why don’t you get up to date and Google Obama 401k.-
ANSWER:
privatizing social security is what republicans want, they all just got a little closer to doing it when that tax bill was passed a few weeks ago. by having workers pay a stupid 2% less into social security and calling it a tax cut, BS it’s all part of there plan to cry social security out of money slash and burn…………………..oh and by the way we just took for 401k’s
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QUESTION:
How many Individual retirement accounts allowed?-
ANSWER:
You can have as many as you want but you cannot contribute more than the max for all of them combined.
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QUESTION:
Should Social Security convert to a program of individual retirement accounts? Why or why not?-
ANSWER:
The economic answer is yes, Social Security is really nothing more than a legal Ponzi scheme with those currently working paying in and the retired getting benefits. In theory it works if the number of workers is large in relation to the number getting benefits. As people live longer and the population does not grow very fast (fewer workers per retiree) the plan breaks down.There is no SS Trust Fund (an account with with your name on in inside the government) , the government gets the money, spends it and puts an IOU in the pot. Right now more money comes in from workers than goes out to retirees, but that will reverse somewhere around 2015 give or take 3-4 years. Then how to the retirees get paid? By raising SS taxes, cutting benefits, or borrowing more money from the Arabs and or China.
Politically, only going deeper in debt will fly. Deficit spending by both government and individuals is what has brought about the economic slowdown we are in today. We will get out of this slowdown, but only by pushing out the problem to a later date.
Historically, the stock market has returned just under 8% per year adjusted for inflation(therefore you buying power doubles about every 9 years), while the payback for SS is less than 2%.
The reality is we can’t afford the transition, so it won’t happen. I am 62 and decided at 30 I could not count on SS so i cut my lifestyle invested well an a comfortable today.
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QUESTION:
when rolling over individual retirement account is it better to have the funds transferred or get the check ?
I have heard that the institution issuing the check will withhold taxes, but if you have the funds transfered, this will not happen in the case of rolling over your IRA, or individual retirement account, you will get a 1099 for tax purposes. To explain better this is when you have an IRA account with a bank or a certain institution, and you are planning to take your account to another institution, within 60 days, and put it in another IRA account.-
ANSWER:
I work at a bank, you definately want to transfer the funds so you don’t receive any penalties and don’t become tempted to spend the money before retirement. You will need all the money you can get when you become old cuz all us young’uns are pretty much screwed out of social security.
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QUESTION:
Where can I find statistics for Individual Retirement Accounts (IRAs)?
Specifically I’m looking for estimates of:
- Estimated number of IRAs nationwide
- Estimated number of IRAs per state
- Estimated average amount in each IRA.Any guidance to a source is appreciated.
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ANSWER:
type ira statistics into search for questions and you will get a lot of info!!!
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QUESTION:
If I have three Individual Retirement Accounts and I’m supposed to take a mandatory distribution of ,000?
from each account, by the end of the year (a total of ,000). Can I just take ,000 from one account and leave the other two accounts alone, or do I have no choice but to take ,000 from each account? Each IRA account is held at a different financial institution.If I am allowed to take all the money from one account, and leave the other two accounts alone, do I have to prove to those two banks that I’ve already taken the required funds out from a different IRA that I hold.
Thank you to those who answered. For those who ask about why they’re not rolled together into one account. It’s primarily for diversification purposes (ie. not putting all my eggs in one basket).-
ANSWER:
When you have 3 IRA accounts each separate IRA account RMD is calculated separately. Once you know the correct RMD for each IRA account you can add the 3 amounts together and take the total RMD for all 3 accounts from the 1 that you choose just make sure that it is the correct total RMD combined amount for all 3 IRAs.
Go to the www.irs.gov website and use the search box for Retirement Plans FAQs regarding Required Minimum Distributionshttp://www.irs.gov/retirement/article/0,,id=96989,00.html
Can an account owner just take a RMD from one account instead of separately from each account?
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QUESTION:
when was the Individual retirement account tax saving plan first started?
I am trying to calculate the “basis” of the nondeductible IRA account; and I think it started in 1976…….Thanks.-
ANSWER:
IRAs were created by the Employee Retirement Income Security Act of 1974 (ERISA) (Pub.L. 93-406, 88 Stat. 829, September 2, 1974)The traditional IRA has been in existence since 1975.
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QUESTION:
I ,000 is placed in an Individual Retirement Account that will pay interest of 7% per annum compounded conti?
I ,000 is placed in an Individual Retirement Account that will pay interest of 7% per annum compounded continuously, what is the effective annual rate of interest?a. 7.251%
b. 7.105%
c. 7.323%
d. 7.35%
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ANSWER:
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QUESTION:
after 5 yrs of owning a Roth individual retirement account (IRA) a person wants to buy his 1st home, the?
continue…
person can withdraw money from the Roth IRA…
A) tax and penalty free
B) but must pay a set penalty at the time of withdrawal
C) and have penalties deferred until retirement
D) and owned taxes are deferred until retirement-
ANSWER:
You should be able to
A) take up to ,000 free of penalties and withdraws for a first time home purchase
B) You may also be eligible to remove your contributions, tax and penalty free.
WIthout detail information it is hard to answer correctly.
5yrs and less, or 5 years and one day can make difference.
Account values, deposits etc might needed to be factored in also.
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QUESTION:
Is an Individual Retirement Account considered liquid or an investment?
i was just wondeirin-
ANSWER:
It depends on the state your in but most times it is liquid due to the ability to add to it frequent additions to it and a investment is done as need due to the ability of the investments status
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QUESTION:
You have 0000 in an Individual Retirement Account?
You have 0,000 in an IRA (Individual Retirement Account) at the time you retire. You have the option of investing this money in two funds: Fund A pays 3.6% annually and Fund B pays 6.1% annually. How should you divide your money between fund A and Fund B to produce an annual interest income of 25,750?-
ANSWER:
You have 0,000 total to invest.If you invest X in the 3.6% account, then you must have invested 0,000 – X in the 6.1% account.
The formula to solve is therefore:
3.6%(X) + 6.1%(500,000 – X) = 25,750
Now solve for X.
The formula reduces to:
6.1%(500,000 – X) = 25,750 – 3.6%(X)
Which further reduces to:
30,500 – 6.1%(X) = 25,750 – 3.6%(x)
Which further reduces to:
4,750 = 2.5%(X)
Which finally reduces to:
190,000 = X
So then 500,000 – X = (500,000 – 190,000) = 310,000
So the amount invested in the 3.6% account = 0,000, and the amount invested in the 6.1% account is 0,000,
You can prove this out by solving for:
(3.6% X 0,000) + (6.1% X 0,000), this equals
,840 + ,910 = ,750 – and you’ve proved your answer.
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QUESTION:
Is it possible to have more than one Individual Retirement Account?-
ANSWER:
Hi, you can have more then one but, my advice is to limit it to two a regular IRA if you make contributions and want to take a tax deduction and do not have a qualified plan at work and a Roth IRA. Consolidation is the best approach reduces fees, makes it easier to manage your portfolio, and keeps it simple.
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QUESTION:
Is there something like the American IRA (individual retirement account) in Italy?-
ANSWER:
You might have more luck posting this under Taxes>Italy
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QUESTION:
when was the the first Individual Retirement Account?-
ANSWER:
IRAs were created by an amendment to the IRS code in 1974 entitled the Employee Retirement Income Security Act of 1974 (ERISA).
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QUESTION:
What does it mean by “Social Security Be Changed to Include Personal Retirement Accounts”?
Does it mean the government will put partial of the payroll tax into individual’s personal retirement saving account, so when the person retires, he will receive the government benefit from social security and a reliable retirement salary from his company? also what is the different between social security and personal retirement account? what are the advantages and disadvantages. thank you.-
ANSWER:
it just means the government now has a slightly different way of cheating out of what is rightfully yours. tmm why should the government have to dole out your own money? notice the billions of dollars the government has let fall out of retirement accounts as companies ‘restructure’ that is stolen money. yours mine and ours . not the company’s or the government.
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QUESTION:
Is it true that Obama plans to take money from larger retirement plans in order to redistribute the wealth?
A friend of mine told me that Obama plans to take money from individual retirement accounts in order to fund his redistribution of wealth program. Has anyone else heard this?-
ANSWER:
That would be patently false. Obama has consistently said that retirement accounts are necessary to ensure that retirees are able to live in dignity and support themselves. In fact, he supports extending individual retirement accounts. People, among them Ben Stein, have mis-characterized his proposal to increase capital gains taxes as an additional tax on retirement account distributions. Since retirement account distributions are distributed as income and not capital gains, they would not be subject to capital gains taxes, whether the rate now or increased.
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QUESTION:
What is a Individual Retirement Account?-
ANSWER:
An investing tool used by individuals to earn and earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs.Traditional and Roth IRAs are established by individual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for sole proprietors and partners) up to a set maximum dollar amount. Contributions to the Traditional IRA may be tax deductible depending on the taxpayer’s income, tax filing status and coverage by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible.
SEPs and SIMPLEs are retirement plans established by employers. Individual participant contributions are made to SEP IRAs and SIMPLE IRAs.
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QUESTION:
Can I direct part or all of my refund to my prior year individual retirement account (IRA)?-
ANSWER:
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QUESTION:
An individual retirement account math problem?
Please help. I have no idea how to go about this problem. I have the First part but cannot figure out the rest.An Individual Retirement Account (IRA) is an annuity that is set up to save for retirement. IRAs differ from TDAs in that an IRA allows the participant to contribute money whenever he or she wants, whereas a TDA requires the participant to have a specific amount deducted from each of his or her paychecks.
When Bo McSwine was 16, he got an after-school job at his parents’ barbecue restaurant. His parents told him that if he put some of his earnings into an IRA, they would contribute an equal amount to his IRA. That year and every year thereafter, he deposited 0 into his IRA. When he became 21 years old, his parents stopped contributing, but Bo increased his annual deposit to ,800 and continued depositing that amount annually until he retired at age 65. His IRA paid 7.75% interest.
(a) Find the future value of the account. (Round the answer to the nearest cent.)
This is the one that i got right. I got: 7136.83(b) Find Bo’s and his parents’ total contributions to the account.
Bo’s contribution is? $
Parents’ contribution is? $
Total contribution is ?(c) Find the total interest.
$(d) Find the future value of the account if Bo waited until he was 18 before he started his IRA.
$(e) Find the future value of the account if Bo waited until he was 25 before he started his IRA.
$if you could show me how to this, that would be great. thank you.
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ANSWER:
I just put the numbers into a spreadsheet and had excel add them up.
However I guess you could do it by hand. for example, in part (b) the parents contributed for five years. so 5 times 900 = 4500
also there was 1800 contributed for 49 years for a total of 88200 of which 4500 was contributed by his parents so that means he put in the rest, or 83700
in part (c) – (e) you would use the same formula you had used for (a) except that you started the contributions later and did them for fewer years.(a) 877136.83
(b) 83700.004500.00 88200.00
That’s if they did not contribute the year he turned 21
(c) 788936.83
(d) 752276.17
(e) 436672.65
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QUESTION:
Difference between social security privatization and turning 401ks into government run accounts?
Since democrats were so against turning social security into government run individual retirement accounts (privatization), what is all this talk I hear about them thinking of turning 401ks and IRAs into government run individual retirement accounts? Maybe I’m misunderstanding something. Please explain.-
ANSWER:
Yes there has been talk of that. 401k can loose money, but on the whole makes money.
The govt wants it invested in low yield govt securities where it will make quite a bit less money
but will be safer. However, investors have the option of investing in secure govt securities.
This is just another way for the govt to get money.
SS is a low interest govt loan and makes little money, if privatized it will be invested in the stock
markets by experienced investing firms. They could loose money, but will probably make more money than it does at the present time.
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QUESTION:
Self Employed Individual Retirement Account: SEP IRA or Solo 401k?
I have an S corporation established couple years ago, I am the president, vice president, treasurer, and janitor… I do engineering consulting, with no employees…i’m generating about 0k per year in income.. my overhead/expense are very very minimal, so i normally get hit with a big tax bill at the end of the year… So I am seeking an individual retirement account…and need your help/opinion…The options are SEP IRA or Solo 401k, i was researching and seems i can contribute about 40k or so into each… what are the advantages/disadvantages of each? how about admin fees? (i read for the first 3 years they give you a 0 tax break for admin fees).. besides that, I would like to save up about 20-25% of each income check into that retirement account…Any advise is greatly appreciated.. Thank you.
No I do NOT pay myself W2, I just dig into the bank account (i am working on setting up a payroll for me), but at the end of the year, i file the 1120 i think tax form for the corporation, all revenue less deductions, issue a K1, and roll that into my personal…-
ANSWER:
Tax deductions are the same for both. SEP-IRA is less paperwork and tax reporting (hence the “S”, Simple). The tax credit is the same. I’ve had a SEP, and it was as easy as opening an IRA. We’ve opened solo 401ks, and there’s a lot more paperwork, and you have to file a report to the IRS every year. No annual report required with a SEP-IRA.http://www.dol.gov/ebsa/publications/SEPPlans.html
http://www.smsmallbiz.com/benefits/The_Solo_401(k).html
Schwab, Fidelity, Vanguard all sponsor both types. Call their Retirement Plan depts and ask them.
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QUESTION:
You have 0,000 in an IRA (Individual Retirement Account) at the time you retire. You have the option of inv?
You have 0,000 in an IRA (Individual Retirement Account) at the time you retire. You have the option of investing this money in two funds: Fund A pays 3.6% annually and Fund B pays 6.1% annually. How should you divide your money between fund A and Fund B to produce an annual interest income of 25,750?
Please help I am trying to explain this to my daughter and do not understand how to set up the equation to get the answer she needs. Thank you-
ANSWER:
You have 0,000 total to invest.If you invest X in the 3.6% account, then you must have invested 0,000 – X in the 6.1% account.
The formula to solve is therefore:
3.6%(X) + 6.1%(500,000 – X) = 25,750
Now solve for X.
The formula reduces to:
6.1%(500,000 – X) = 25,750 – 3.6%(X)
Which further reduces to:
30,500 – 6.1%(X) = 25,750 – 3.6%(x)
Which further reduces to:
4,750 = 2.5%(X)
Which finally reduces to:
190,000 = X
So then 500,000 – X = (500,000 – 190,000) = 310,000
So the amount invested in the 3.6% account = 0,000, and the amount invested in the 6.1% account is 0,000,
You can prove this out by solving for:
(3.6% X 0,000) + (6.1% X 0,000), this equals
,840 + ,910 = ,750 – and you’ve proved your answer.
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QUESTION:
I have some questions about an IRA (individual retirement account). Can someone help me?
I was just wondering how much % interest you collect and I was hoping someone could tell me a little bit more about it. All you do with it is just deposit money whenever you want and it just collects interest? I’m guessing you can’t withdraw money from it? Is your money safe in one of these accounts or can you lose it somehow? Are you required to keep your money in the account for a certain amount of time?I would like to start early with my retirement plan. Based on my calculations, if I deposit ,000 a year for 40 years and at 10% interest, I’ll have ,808,840.59.
I would much rather have that then rely on social security.
Wait a minute… I could just deposit ,000 total and in 40 years w/ 10% interest, I’ll end up having 2,494,518.31. Are you allowed to only make 1 deposit in an IRA?
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ANSWER:
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QUESTION:
suppose you set up a new IRA (individual retirement account) that pays an APR of 8.2%, compounded monthly?
if you contribute 130 per month for 11 years, how much will the IRA contain at the end of that time?-
ANSWER:
,718.12
The formula is:
FVoa = PMT [(((1 + i)^n) - 1) / i]
Where:
FVoa = Future Value of an Ordinary Annuity
PMT = Amount of each payment
i = Interest Rate Per Period (.082 / 12)
n = Number of Periods (11 x 12)
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QUESTION:
Individual Retirement Account(IRA) is saving account /investment account or other?-
ANSWER:
investment account for retirement.
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QUESTION:
HELP! Waldo deposited ,000 at the end of each year into an Individual Retirement Account at Boise Bank…?
the account pays 7 percent compounded annually. How much will be in the account in 25 years?2) Walton deposited ,750 into an ordinary annuity at the end of each quarter in an account earning 8 percent interest compounded quarterly. What is the future value of the account in 3 years?
PLEASE SHOW YOUR WORK! I’d love to learn!
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ANSWER:
Q1
2000 * annuity accumulation factor,where annuity accumulation factor = ((1.07)^25-1)/0.07 = 63.249
So he has
2000* factor = 6,498.0754 at the end of 25 yearsQ2
Each quarter earns 2%, and 3 years is 3*4=12 quarters
with the FV annuity formula (similar to Q1)
1750* [(1.02)^12-1)/0.02] = 471.157
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QUESTION:
Individual Retirement Account question?
All of the following are characteristics of an IRA, except:
a. limited check writing ability
b. contributions are tax-deferred
c. usually combined with CD account
d. contributions must come from taxable incomeI’m not sure which is the right answer. I’m pretty sure that choice C is a characteristic of an IRA, so that shouldn’t be the answer. I think that contributions are tax-exempt in an IRA, but I’m not sure.
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ANSWER:
It is A. You can’t write checks on an IRA.
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QUESTION:
I am starting an IRA(Individual Retirement Account) would you use an Amertized formula or an Annuity one?
Annuity is
FV= payment [(1+r/n)^nt-1/(r/n)]amertized is
p(1+r/n)^nt = payment [(1+r/n)^nt-1/(r/n)]-
ANSWER:
I don;t understand your question – you put money into an IRA and invest it in either stocks, bonds, mutual funds or money market funds. none of those have a set “interest rate” that can be plugged into a formula. most of the income will be capital gains or dividends and you could lose money
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QUESTION:
An individual retirement account (IRA)…?
a) is limited by a percentage of net business earnings
b) can be used by all taxpayers, regardless of income level
c) may provide current tax reduction, as well as tax-deferred income earnings for future retirement
d) has a guaranteed retirement amount by the federal government
e) is similar to a profit-sharing plan, in that the employer also contributes to the account-
ANSWER:
C
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QUESTION:
one can hold Individual Retirement Account in a Bank or in institution or in govt agency….?-
ANSWER:
Banks, brokerages, mutual funds but not government agencies.
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QUESTION:
5. most individuals manage their individual retirement account (IRAs) so they?
a) maximize the amount of money they withdraw
b) minimize the amount of taxes they must pay
c) retire with a minimum amount of money
d) leave all their money to government.-
ANSWER:
b
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QUESTION:
Obama and Biden introducing new plan for Automatic Individual Retirement Accts, why would anyone opt for this?
None of the programs introduced so far by this Administration have been successful, why would anyone take this option instead of the proven Individual Retirement Account or the Roth IRA?
#David-no link, but I have ears and I just heard the two of them explain it. Who knows how long it will take to get it out there on line, if ever.
#justagre, IRA’s do not lose any value if they are on deposit with a FDIC Insured Bank. It was the the funds in the stock market that lost value, not Traditional IRA’s or Roth IRA’s in FDIC Bank accts.-
ANSWER:
Obama is trying to start another ponzi scheme to swallow the massive debt they are creating by starting this new retirement program. Unless they make it mandatory I would opt out of any nonsense like that.
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QUESTION:
value of an ira. in an individual retirement account valued at 53900 ,a couple has 500 shares of stock , some?
I am having trouble solving this please let me know how to find the answer?thanks:)-
ANSWER:
IF the only holding in the IRA is the 500 shares of stock worth ,900, then the stock is worth 7.80 per share.
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QUESTION:
Individual Retirement Account (IRA) Question!?
I want to open an IRA account but have no information on it. I am about 48 years old and am interested in opening an IRA account for both my wife and myself. Can someone give me all the essential information please? Serious answers only and thanks in advance to those who answer!-
ANSWER:
There are two kinds ROTH and Traditional. Since you are under 50 you can put in 5K each. ROTH is with after tax money then tax free for life, Traditional is tax deductible like a 401K reducing your tax this year but taxed as ordinary income in retirement.You can invest in almost anything. I would open the accounts at a brokerage or no load mutual fund company. Then you can invest in any investments they sell. You can get a CD at the bank but probably not beat inflation and banks aren’t a place to invest just to store money you need soon.
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QUESTION:
Should we have this as a retirement plan?
Chile requires that ALL workers, regardless of income, set aside 10% of their paychecks into an individual retirement account that the worker cannot touch until they retire. This solves two problems – first, everybody saves. Nobody has the option of saying “I can’t save this month”. Secondly, it would take the strain off the social security administration and how it is eventually going to go broke.Do you think it is a good idea?
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ANSWER:
It would have been if a) it had been there from year 1 and b) the US SSA didn’t give out anything besides retirement benefits.The US system is a safety net. If you are a low income worker, you get more than you paid in. If you are the spouse or a dependent of a worker, you get an amount based on what that person paid. If you have destitute, the hand out SSI benefits. All of these cost more than simply retirement benefits.
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QUESTION:
Social Security Retirement Accounts: Is SS running out of money?
The Social Security and Medicare Trust Funds are running trillion or more deficits. Many argue that it is time to reform social security by allowing individuals to management their own retirement by taking SS payroll deductions and investing that money into personal accounts. Others are against such action. What are your thoughts?-
ANSWER:
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QUESTION:
Question about pulling money from a retirement account?
I had a 401k that got rolled over into a individual rollover retirement account from an employer who closed their business long ago. Now i’m in a financial hardship, and thinking of pulling the money now (knowing i’ll be taxed and penalized). It’s only 1700 dollars. Will they take half?
Im in the 25percent tax bracket (before or after pulling possible funds from that acct.)-
ANSWER:
You should speak to the holder of the 401k for details. At worst you can lose most of the interest and be charge a fee. The government will consider it earned income and tax you on the interest accrued.
It would not be half.
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QUESTION:
At what age can I withdraw my Individual Retirement Acct. From Bank w/ No Taxes?
It is a Certificate of Deposit bank retirement account…-
ANSWER:
You mean a penalty. You will pay taxes at any age from a traditional IRA.59 and a half is the usual age. Note: there are several exceptions that may exclude the penalty. see form 5329 http://www.irs.gov/pub/irs-pdf/i5329.pdf
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QUESTION:
If social security is privatized, as it should have been from the start, how the disability part be funded?
Would it be from our individual retirement accounts as a percentage or would funding come from some other tax?
(Increased income taxes, buisiness taxes etc.)-
ANSWER:
No it should not be privatizedThat will bring in a nightmare of people, when they reach their retirement age, not having squat, because they made wrong investment decisions.
The majority of people are responsible, but shiiiiiiit happens from the people who are not or outside forces and issues that the individual has no control over. Government is there to protect the people. I don’t understand why so many are against that.
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Life is so simple, but we insist on making it complicatedConfucius
551 – 479 BC
===============Peace
Jim
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QUESTION:
Will our retirement funds be forced to become the buyer of last resort for US treasury obligations?
Excerpts:I fear that today the control, nationalization and ultimate confiscation of trillions in private US retirement plan assets is on the horizon. Rick Santelli alluded to the possible nationalization and forced investment into treasuries on CNBC as recently as January 8, 2010. There was also similar coverage on Bloomberg and Business Week.
Says Holland, “I think the mandatory IRAs just proposed by Obama is the first step in stealth nationalization and forced investment of our retirement benefits to support the U.S. Treasury debt market.”
http://www.ronaldholland.com/retirementtrap.htm
There is an estimated trillion worth of private retirement plans in the United States; trillion in IRAs alone; this constitutes 35 percent of all private assets in America. That is what the Obama government is eyeing to help plug the multi-trillion dollar deficit in his big spending budget.
You could call this move Obama’s attempt to “pull an Argentina.”
What’s “An Argentina?”
In October 2008, Argentine President Cristina Kirchner—a peronista—confiscated US billion worth in that country’s 10 privately managed pension funds. This was presented as an emergency measure to meet her faltering government’s financing costs. The Argentine congress went along with this radical property grab of individual retirement accounts, 401Ks and the like.
Could this happen in America?
Should you be worried about this latest radical Obama move?
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ANSWER:
Interesting. Believe it or not, I was thinking about something along those lines, but had not formulated things out yet. Great minds think alike, huh?Confiscation of retirement has already happened. This confiscation you speak of is in comparision to what LBJ has done to the biggest Ponzi scheme the world has seen—> Socialist Security. FDR had set it up as a trust. LBJ was drooling at the mouth at all that money and then dissolved the socialist security trust to get his hands on it for his failed war on poverty. He then put it into the general budget to lay the burden on someone else, which would be future generations. LBJ then spent it all on his failed war on poverty, and that war on poverty continues to be an utter sink hole. Once you start feeding a stray cat, the liberals won’t allow it to stop.
Yes, the government will be “borrowing” our retirement money from the private sector. This scheme will create yet another elaborate Ponzi Scheme. It will be the last gasp of a dying nation. Obama is the very worst, he his a combination of FDR and LBJ. Hang onto your hats… we are going down!
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QUESTION:
USA ways to pay IRS taxes from 1040 form? IRA accounts?
IRA = Individual Retirement Accounti have a usa IRS tax bill which i need to pay but i do not have a usa current and savings checking account, I have an IRA account, does anyone know if its possible to pay a IRS tax bill directly from an IRA? for example, the IRA bank write a check to the IRS?
Or perhaps I could “withdraw” some money from the IRA and ask the IRS to withold say 70%of the value of the money I withdraw so that goes directly to the IRS, essentially over paying taxes on the money in this transfer to make up for the bill i owe?
otherwise, is it possible to transfer the money for the bill to a relatives current account and they just pay by check and make a reference on the check it is for my bill not theirs?
i think the best way would to withdraw some money having it be with held at 70% if that is possible, but would taking the money out this year and over with holding the money i owe from a previous year work? at least bring my bill closer to zero or even over paying just so i stop interest payments on the bill? thanks
i know i could pay visa, etc but they charge an extra 2.49% on top of your bill for that so its not ideal.. thanks
i could start a usa current account but i live overseas and its not much use to me other than to pay my bill and it would take a while to open and sort out the paperwork from abroad, when i just want to simply pay my damn bill now not in a few weeks time. thanks
i thought it would be LESS complicated to just with hold more tax, that way i would not have to involve my grandparents who are over 80 and 90 and who have enough problems without sending in my taxes, i was also told that if the check is written by someone else it is often paid into the tax account of the person who has written the check, hence it would be MORE of a hassle straightening that out than just having it with held originally.
my with holding 70% INCLUDES the extra 10% for this years taxes, i CAN NOT just go into a LOCAL bank BECAUSE I LIVE OVERSEAS, hence i would have to FLY to the USA to do that.-
ANSWER:
You may not like the extra percentage but sounds like visa is the only way for you to go.
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QUESTION:
I want to open an ING Orange Savings Account. There is a restriction that I don’t understand. Do you?
Orange Savings cannot be used for business, trust, power of attorney, beneficiary or individual retirement accounts. Wjat does this mean exactly? Like if I become sick and I give my mother power of attorney… Can she get to that money if need be?
But what does this restriction mean?-
ANSWER:
What this means is that when you set up the account, you can not set up a “name” on the account that reflects any of those. I’ll try to tell you a little more so u’ll understand.If you want to open a business account, the account would usually look like this:
Name 1: (Your Name)
Name 2: DBA (Business’s Name)DBA stands for “doing business as”
A beneficiary account would look like this
Name 1: (Your Name)
Name 2: (Their Name), BeneficiarySo what they are saying is that they do not allow you to set up an account to look like these, but your mother could still withdraw the money if she had your card and the PIN number.
Hope that helps
http://www.financialgym.org
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QUESTION:
How much should she deposit initially to reach 00000?
A 25year old is opening an individual retirement account IRA at a bank. Her goal is to accumulate million in the account by the time she retires from work in 40 years. The bank manager estimates she may expect to recieve 8% nominal annual interest compounded quaterly thourhout the 40 years. The lady believes her income will incresae at a 7% annual rate during her carreer. She wishes to start with as low a depot as possible to her IRA now and increase it at a 7% rate each year. ASsuming end of year deposites how much should she deposit the first year?-
ANSWER:
I just plugged this into a spreadsheet and looked at
the numbers for 160 quarters (40 years). If she started
with 80.79 and deposited 7% more each year
(every fourth quarter), and the bank provided 8% (2%
each quarter), she would have 00000.7896 at the
end of the 160th quarter.Unfortunately, Yahoo Answers will squash the leading
blank spaces from the spreadsheet so that the columns
will be misaligned. Hopefully you can see how the
calculation goes.Deposits Interest Total
1280.7900 0.0000 1280.7900
1 25.6158 1306.4058
2 26.1281 1332.5339
3 26.6507 1359.1846
4 1370.4453 27.1837 2756.8136
5 55.1363 2811.9499
6 56.2390 2868.1889
7 57.3638 2925.5526
8 1466.3765 58.5111 4450.4402
9 89.0088 4539.4490
10 90.7890 4630.2379
11 92.6048 4722.8427
12 1569.0228 94.4569 6386.3224
13 127.7264 6514.0488
14 130.2810 6644.3298
15 132.8866 6777.2164
16 1678.8544 135.5443 8591.6151
17 171.8323 8763.4474
18 175.2689 8938.7164
19 178.7743 9117.4907
20 1796.3742 182.3498 11096.2148
21 221.9243 11318.1391
22 226.3628 11544.5018
23 230.8900 11775.3919
24 1922.1204 235.5078 13933.0201
25 278.6604 14211.6806
26 284.2336 14495.9142
27 289.9183 14785.8324
28 2056.6689 295.7166 17138.2180
29 342.7644 17480.9823
30 349.6196 17830.6020
31 356.6120 18187.2140
32 2200.6357 363.7443 20751.5940
33 415.0319 21166.6258
34 423.3325 21589.9583
35 431.7992 22021.7575
36 2354.6802 440.4352 24816.8728
37 496.3375 25313.2103
38 506.2642 25819.4745
39 516.3895 26335.8640
40 2519.5078 526.7173 29382.0891
41 587.6418 29969.7308
42 599.3946 30569.1255
43 611.3825 31180.5080
44 2695.8733 623.6102 34499.9915
45 689.9998 35189.9913
46 703.7998 35893.7911
47 717.8758 36611.6669
48 2884.5845 732.2333 40228.4847
49 804.5697 41033.0544
50 820.6611 41853.7155
51 837.0743 42690.7898
52 3086.5054 853.8158 46631.1110
53 932.6222 47563.7332
54 951.2747 48515.0079
55 970.3002 49485.3081
56 3302.5608 989.7062 53777.5750
57 1075.5515 54853.1265
58 1097.0625 55950.1890
59 1119.0038 57069.1928
60 3533.7400 1141.3839 61744.3166
61 1234.8863 62979.2030
62 1259.5841 64238.7870
63 1284.7757 65523.5628
64 3781.1018 1310.4713 70615.1358
65 1412.3027 72027.4386
66 1440.5488 73467.9873
67 1469.3597 74937.3471
68 4045.7789 1498.7469 80481.8729
69 1609.6375 82091.5104
70 1641.8302 83733.3406
71 1674.6668 85408.0074
72 4328.9835 1708.1601 91445.1510
73 1828.9030 93274.0541
74 1865.4811 95139.5351
75 1902.7907 97042.3258
76 4632.0123 1940.8465 103615.1847
77 2072.3037 105687.4883
78 2113.7498 107801.2381
79 2156.0248 109957.2629
80 4956.2532 2199.1453 117112.6613
81 2342.2532 119454.9145
82 2389.0983 121844.0128
83 2436.8803 124280.8931
84 5303.1909 2485.6179 132069.7018
85 2641.3940 134711.0958
86 2694.2219 137405.3178
87 2748.1064 140153.4241
88 5674.4142 2803.0685 148630.9068
89 2972.6181 151603.5250
90 3032.0705 154635.5955
91 3092.7119 157728.3074
92 6071.6232 3154.5661 166954.4968
93 3339.0899 170293.5867
94 3405.8717 173699.4585
95 3473.9892 177173.4476
96 6496.6369 3543.4690 187213.5534
97 3744.2711 190957.8245
98 3819.1565 194776.9810
99 3895.5396 198672.5206
100 6951.4015 3973.4504 209597.3725
101 4191.9474 213789.3199
102 4275.7864 218065.1063
103 4361.3021 222426.4085
104 7437.9996 4448.5282 234312.9362
105 4686.2587 238999.1949
106 4779.9839 243779.1788
107 4875.5836 248654.7624
108 7958.6595 4973.0952 261586.5172
109 5231.7303 266818.2475
110 5336.3650 272154.6125
111 5443.0922 277597.7047
112 8515.7657 5551.9541 291665.4245
113 5833.3085 297498.7330
114 5949.9747 303448.7076
115 6068.9742 309517.6818
116 9111.8693 6190.3536 324819.9047
117 6496.3981 331316.3028
118 6626.3261 337942.6289
119 6758.8526 344701.4814
120 9749.7001 6894.0296 361345.2112
121 7226.9042 368572.1154
122 7371.4423 375943.5577
123 7518.8712 383462.4289
124 10432.1791 7669.2486 401563.8566
125 8031.2771 409595.1337
126 8191.9027 417787.0364
127 8355.7407 426142.7771
128 11162.4317 8522.8555 445828.0644
129 8916.5613 454744.6257
130 9094.8925 463839.5182
131 9276.7904 473116.3085
132 11943.8019 9462.3262 494522.4366
133 9890.4487 504412.8853
134 10088.2577 514501.1430
135 10290.0229 524791.1659
136 12779.8680 10495.8233 548066.8573
137 10961.3371 559028.1944
138 11180.5639 570208.7583
139 11404.1752 581612.9335
140 13674.4588 11632.2587 606919.6509
141 12138.3930 619058.0440
142 12381.1609 631439.2048
143 12628.7841 644067.9889
144 14631.6709 12881.3598 671581.0196
145 13431.6204 685012.6400
146 13700.2528 698712.8928
147 13974.2579 712687.1507
148 15655.8879 14253.7430 742596.7816
149 14851.9356 757448.7172
150 15148.9743 772597.6915
151 15451.9538 788049.6454
152 16751.8000 15760.9929 820562.4383
153 16411.2488 836973.6871
154 16739.4737 853713.1608
155 17074.2632 870787.4240
156 17924.4260 17415.7485 906127.5985
157 18122.5520 924250.1505
158 18485.0030 942735.1535
159 18854.7031 961589.8566
160 19179.1359 19231.7971 1000000.7896
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QUESTION:
How long will it take for the investment to double? (math problem)?
How do I solve this?You decided to invest money into individual retirement accounts (IRAs) but need to invest aggressively to make up for lost time, therefore, you want to find an interest that would double your initial investment in a short period of time. After doing your research, the best interest you could fund was 2.75% compounded continuously. How long will it take for your investment to double?
Formula for continuous compounding:
A=Pe^rtP=Principal investment
r=rate
t=time-
ANSWER:
To make it easy pick for the investment, so you want to get
2 = 1 e^(0.0275t)Do Ln of each side
ln 2 = ln e^ (0.0275t)The ln cancels the e so it’s
ln 2 = 0.0275t
so just divide by 0.0275
t = 25.2 years
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QUESTION:
how much can I deduct of my deposit of IRA?
My AGI is 58,000 and I deposited 2000 into my individual retirement account (IRA). How much can I deduct ?I calculated that and I got 0 of deduction. Is that right?
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ANSWER:
Okay… This is dependent on whether you are a participant in an employer sponsored retirement plan… 401k, 403b etc.If you are not, there is no limit of deductibility regardless of your AGI.
If you are part of an employer plan… The guy’s analysis above is accurate.
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