People on TikTok create investment advice videos? And I’m supposed to trust whatever this talking head is telling me? No chance. Of course, the person on TikTok could hold a number of higher education degrees and financial certifications, but until I know for sure who they are, what they are talking about, and what their objective is, I will keep my distance.
The Internal Revenue Code is over 4,000 pages of often unintelligible tax jargon. So, it shouldn’t surprise anyone that the law contains more than its share of baffling and inconsistent provisions.Here are four examples pertaining to IRAs and company retirement plans:
Distributions taken from an IRA before attaining the age of 59 ½ are generally subject to an early distribution penalty of 10% of the taxable amount of the distribution. Congress put the penalty in place to deter IRA owners from using their funds before their retirement. However, Congress also realized that sometimes we really do have a need for these funds so they made some exceptions to the penalty. One of these exceptions is the disability exception. But there is a catch.
Distributions taken from an IRA before attaining the age of 59 ½ are generally subject to an early distribution penalty of 10% of the taxable amount of the distribution. Congress put the penalty in place to deter IRA owners from using their funds before their retirement. However, Congress also realized that sometimes we really do have a need for these funds so they made some exceptions to the penalty. One of these exceptions is the disability exception. But there is a catch.
When you leave an employer, you have an important decision to make. If you participated in a company plan, you need to decide what to do with your money. Should you roll over your funds to an IRA? Here are 3 exceptions to the early distribution penalty that just apply to IRAs.
There are two things to keep in mind when you are discussing ages and retirement plans. One is the age itself and the other is what does that age mean. For example, when is age 55 not 55? You will understand as you read further into the important ages associated with retirement plans.
With the calendar well into May, wedding season has arrived in full force. You have probably heard the saying that marriage has its benefits. Well, this is especially true when it comes to the IRA rules. If you are married, you may have some IRA options that would not have been available to you if you had not taken the plunge and tied the knot. Here are 4 IRA benefits you may have if you are married.
Are you facing big college tuition bills? Generally, if you take a taxable distribution from your IRA before you reach age 59 ½, you will be subject to an additional 10% early distribution penalty. However, an exception to the penalty allows you to take a penalty-free distribution from your IRA if you use the funds for qualified higher education expenses. If you decide to tap your IRA early in order to pay for education costs, you will want to avoid these four mistakes that others have made.
IRAs are designed to be used for retirement savings. Ideally, to maximize the benefits of these accounts, you should not touch these funds before reaching retirement age. However, in the real world, you may need money and consider tapping your IRA earlier. If you do, you should be aware of the 10% early distribution penalty. This penalty is assessed on early distributions from IRAs, in addition to any taxes you may owe. Here are ten things you should know about the 10% early distribution penalty and IRAs.
When you encounter tough economic times, you may be tempted to tap your retirement plan. If you are considering this, you will want to proceed carefully. If you are under age 59 ½, any distributions you take may be taxable and also subject to the 10% early distribution penalty. Whether or not there is an exception to the penalty for financial hardship is a common misconception.
