Converting a traditional IRA to a Roth IRA (or converting a workplace retirement plan) is optional. It is up to each IRA owner to decide if converting makes sense in their particular situation. Roth conversion is not a universally beneficial transaction, so each scenario must be evaluated individually. We all have different opinions and financial goals.
On July 4, contributions to Trump accounts, a new savings vehicle for children, will become available. In these final days before their launch, we have been getting questions from parents about exactly what they should be doing to take advantage of this new savings opportunity. Here is what parents need to know as we count down the days to the arrival of Trump Accounts:
If you are under age 59½ and you converted your traditional IRA to a Roth IRA, you will need to watch out for the five-year rule for penalty-free distributions of converted funds. Not understanding how the rule works can result in unexpected penalties when you withdraw your Roth IRA funds. Here are five things you need to know:
Excess IRA contributions occur for many reasons, like making a contribution without eligible compensation, accidentally exceeding the Roth IRA phase-out limits, rolling over a required minimum distribution (RMD), etc. Excess contributions to 401(k) plans can also occur. A plan participant might contribute to one plan, quit, get a new job, and then inadvertently exceed the combined annual deferral limits to plan #2 at the new job. Regardless of why an excess happened in either an IRA or a 401(k), the correction methods between the two are drastically different.
The year 2025 was filled with many significant events, from ushering in a new president, to a brief but alarming market correction. Overall, it proved to be a great year for investors. Investors enjoyed strong returns, and major indexes reached multiple new highs. The Fed’s decision to lower interest rates in the latter half of the year, a continued healthy and resilient economy, and strong corporate earnings fueled positive investor sentiment.
