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You have many advantages to reap from IRAs, such as tax benefits and investment flexibility. However, IRAs come in different types, each with its own set of rules, pros and cons.READ THE ARTICLE
A variety of mistakes can be made in managing IRAs, but five of the 20 common mistakes to avoid listed here include:
📌 Assuming a Roth IRA is always best: Roth IRAs have tax-free benefits, but traditional IRAs might be better for those with current tax deductions and lower expected retirement tax rates.
📌 Not understanding the Roth IRA five-year rule: Roth IRA withdrawals must satisfy a five-year rule, especially after converting traditional IRA assets to a Roth.
📌 Ignoring asset location in IRAs: Allocate higher-yielding securities in traditional IRAs for tax-deferred benefits and growth-oriented assets in Roth IRAs.
📌 Incorrectly handling IRA rollovers: Transferring funds between IRAs incorrectly can lead to taxes and penalties, especially if the money doesn't reach the new IRA within 60 days.
📌 Not strategizing RMDs: Consider selling appreciated assets to meet Required Minimum Distributions (RMDs) and rebalance portfolios.
The rules that govern your retirement accounts are not as simple as they may seem on the surface. It can pay BIG to work with an expert.