When you were a kid, and your mom asked you clean your room or pause your video game or come in for dinner, you likely told her some variation of, “in a minute” or “I’ll do it later.”
When it comes to teens and money, there is often a disconnect.
Overall, teenagers are taking a greater interest in their long-term financial health — although far fewer understand basic retirement planning.
A majority, or 83%, of 13- to 18-year-olds, said they had already thought about their retirement, according to the results of a survey from Junior Achievement and MissionSquare.
What’s more, like 401(k)s, IRAs provide tax advantages to those who invest in them. If utilized properly, the Roth version of an IRA comes with tax-free withdrawals in retirement. And withdrawing money in retirement without owing any tax is the “holy grail,” says Ed Slott, a certified public accountant and founder of IRAHelp.com.
“You’re still supposed to pay an estimate of what you think you might owe,” says Ed Slott, a certified public accountant and founder of IRAHelp.com. If you fail to pay an outstanding bill by tomorrow, the IRS will tack on penalties and interest payments to what you owe.
A $1 contribution today to a new Roth individual retirement account may not sound like much.But that seemingly small sum might save you a bundle in taxes down the road due to an under-the-radar timing requirement.
Your initial Roth IRA contribution starts the clock on something called the “five-year rule,″ said Ed Slott, a certified public accountant and IRA expert based in Rockville Centre, New York
Unless you hold some niche investments, the value of your portfolio is likely down at the moment.The S&P 500 has surrendered about 18% over the past 12 months, and the broad bond market hasn’t done much better, having lost 13%.
For years, fewer teenagers were looking for summer jobs, opting instead to bolster their college applications with academic programs or unpaid internships. But as the economy bounced back from the pandemic, employers were almost begging for workers and some opportunities were too good to pass up.
If you didn’t put the maximum amount of money into an individual retirement account or health savings account last year, you still have about one month to do so for 2021.
The deadline for 2021 contributions is April 18, 2022, the same day individual tax returns are due.
Anyone facing required minimum withdrawals from retirement accounts should note there’s been a change to calculating those amounts.
House Democrats proposed a rule to forbid Roth conversions for the wealthy as part of a broad package of tax increases on affluent Americans.
But there’s an irony in the proposal, according to tax experts.
