There are several tax issues to consider when making decisions with your retirement funds. We have provided several calculators to
help you with these decisions.
A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages.
First, all contributions and earnings to your 401(k) are tax deferred. You only pay taxes on contributions and earnings
when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account which can range
from 0% to 100% of your contributions. The combined result is a retirement savings plan you cannot afford to pass up.
Use this calculator
to determine how much you can earn by taking advantage of a 401k plan.
Converting a Traditional IRA to a Roth IRA has become a very popular starategy to maximize your retirement funds and avoid taxes.
Anyone can convert, but that doesn't mean that everyone should
convert. Since you have to pay tax on the amount that is converted,
you have many tax issues to consider before you decide to convert. What tax bracket are you currently in? What will your tax bracket be in retirement?
How old are you? All of these questions and more need to be considered when deciding whether to convert or not. The Roth Conversion Calculator
will help you answer these questions and determine if it is a good idea to convert or not.
In 2010, taxpayers converting from a Traditional IRA to a Roth IRA have a unique opportunity to forgo paying tax on the conversion in 2010 and deferring
the tax into 2011 and 2012. If you choose to defer the tax due on the conversion, you would pay 50% of the tax due on your 2011 tax return
and 50% on your 2012 tax return. While deferring tax is usually a good idea, it is not an easy decision given the likelihood of higher tax rates
over the next couple of years. Use the Roth Conversion Tax Deferral Calculator
to determine if you should defer the tax due on conversion to 2011 and 2012 or if you would be better off paying the tax in 2010.
When taxpayers reach the age of 70 1/2, or if they inherit a Traditional IRA from a decedent, they are required to take distributions from the Traditional IRA.
There is a complicated formula to determine the minimum amount to be withdrawn from the account. The Required Minimum Distribution Calculator
will help you determine the minimum amount to be withdrawn.
There are many differences between a Traditional IRA and a Roth IRA. You may get a tax deduction for contributions to a Traditional IRA, but
all withdrawals from a Roth IRA in retirement are tax-free and not subject to Required Minimum Distributions. So which plan is best for you?
The Traditional IRA vs. Roth IRA Comparison Calculator
will help you with this decision.