Happy Friday! Today’s #FeatureFriday takes a dive into three different types of investment accounts and the benefits of each.
Qualified plans include 401(k) & 403(b) plans and Traditional IRA's. These plans qualify for pre-tax contributions (which lowers your taxable income) into your plan and have tax deferred growth. However, when you go to withdraw money from this plan, you will owe ordinary income tax.
The most common kind of Non-Qualified account is funded by after-tax dollars and the earnings/losses will have either capital gains tax or a capital loss if sold. The perk of this account is that it can allow you to invest money from your bank and have access to it at anytime vs. waiting until retirement.
Roth IRA's contributions are with after-tax dollars and all growth is tax free as long as you keep the funds in the account until you are 59.5. Roth IRA’s are subject to income limits (For 2020 your MAGI must be under $139,000 for single filers and $206,000 for married filing jointly).
Some questions I get asked are “Should I be contributing more to my Roth IRA?” “How much should I put into my pre-tax 401(k) vs my Roth 401(k)?” “Where can I put money that I want to use before retirement?” These are all great questions that I will address next week!
Start young and invest often. Families should look to set aside money to invest as early and as often as possible. It can make a big difference.
It's hard to trust people, let alone trust them with your future and finances. Chances are you've felt that way and could benefit from working with a dedicated and trusted financial planner. I desire to help you break down fears and make your visions come true. I offer a complimentary consultation where we explore your personal financial situation, vision cast for your short and long-term goals, and work together to create the life you've wanted with clear and actionable steps. Are you ready to move towards your future with confidence? Contact me directly and let's begin!
https://www.ameripriseadvisors.com/christina.asmus/
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Ameriprise Advisor
The CARES Act waived most RMDs for 2020. Here are answers to the most common questions about these changes. Still have questions? Give me a call.
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How the CARES Act impacts your 2020 RMDs
This week’s #FeatureFriday discusses a unique employer benefit: The After-Tax Account. How do you know if this is available to you? When you go into the contribution section of your 401(k) you should see Pre-Tax, Roth, & After-Tax. For your 401(k), you are allowed to put $19,500 under age 50, over age 50 you can do $26,000 for 2020.
However, if you have the after-tax option you can contribute: the lesser of 100% of compensation or $57,000 (employer contributions are considered into the total) for 2020.
Example: Susan, is 40 years old, makes $200,000, and has funded the maximum amount for her 401k at $19,500. The employer has matched $5,000 which puts her at $24,500. This means she can put an additional $32,500 into her after-tax account. She can leave the contributions in the account & the earnings will grow tax deferred while her contributions remain after tax. Another option is an out of plan Roth conversion. This is where her contributions come out tax free and the earnings are taxed as ordinary income first and then all go into a Roth. Another option is to roll the earnings into a traditional IRA to avoid tax. The After-Tax account allows for additional Roth IRA savings with no income restrictions.
Comment below if you think this is available to you #FeatureFriday’s.
If you work for a large company you should check and see if this benefit is an option!
Christina Asmus Financial Advisor
October 23 at 6:00 PM ·
This week’s #FeatureFriday discusses a unique employer benefit: The After-Tax Account. How do you know if this is available to you? When you go into the contribution section of your 401(k) you should see Pre-Tax, Roth, & After-Tax. For your 401(k), you are allowed to put $19,500 under age 50, over age 50 you can do $26,000 for 2020.
However, if you have the after-tax option you can contribute: the lesser of 100% of compensation or $57,000 (employer contributions are considered into the total) for 2020.
Example: Susan, is 40 years old, makes $200,000, and has funded the maximum amount for her 401k at $19,500. The employer has matched $5,000 which puts her at $24,500. This means she can put an additional $32,500 into her after-tax account. She can leave the contributions in the account & the earnings will grow tax deferred while her contributions remain after tax. Another option is an out of plan Roth conversion. This is where her contributions come out tax free and the earnings are taxed as ordinary income first and then all go into a Roth. Another option is to roll the earnings into a traditional IRA to avoid tax. The After-Tax account allows for additional Roth IRA savings with no income restrictions.
Comment below if you think this is available to you #FeatureFriday’s.
This week’s #FeatureFriday discusses a unique employer benefit: The After-Tax Account. How do you know if this is available to you? When you go into the contribution section of your 401(k) you should see Pre-Tax, Roth, & After-Tax. For your 401(k), you are allowed to put $19,500 under age 50, over age 50 you can do $26,000 for 2020.
However, if you have the after-tax option you can contribute: the lesser of 100% of compensation or $57,000 (employer contributions are considered into the total) for 2020.
Example: Susan, is 40 years old, makes $200,000, and has funded the maximum amount for her 401k at $19,500. The employer has matched $5,000 which puts her at $24,500. This means she can put an additional $32,500 into her after-tax account. She can leave the contributions in the account & the earnings will grow tax deferred while her contributions remain after tax. Another option is an out of plan Roth conversion. This is where her contributions come out tax free and the earnings are taxed as ordinary income first and then all go into a Roth. Another option is to roll the earnings into a traditional IRA to avoid tax. The After-Tax account allows for additional Roth IRA savings with no income restrictions.
Comment below if you think this is available to you #FeatureFriday’s.
As 2020 is coming to a close, I've been thinking about what I have learned in the midst of a hard and unexpected year, and in light of that what do I want my focus to be for 2021.
I have learned that it is okay to slow down. I learned new things about myself and others by being fully present in each moment. I took time to look at my character and see areas that I am proud of and other areas that need growth and development. 2020 showed me how important support, compassion, and growth are to every relationship. For 2021, my word is "mindset." Mindset defined is: the established set of attitudes held by someone. May my mindset be one of growth, integrity, and connection.
I would love to hear what you have learned this year and/or if you have a word for 2021!
This week’s #FeatureFriday is sharing my experience becoming a financial planner and what I love most about my job!
This Wednesday, I celebrated my 7 year anniversary at White and Associates. I began my journey here back in 2013 as our Operations Specialist, then became our Paraplanner, and have now been a Financial Planner for 5 years. My favorite part of my job is helping clients discover their dreams and passions while helping them create specific action steps on how to achieve them.
I am also honored to announce I’ve received the 2021 Five Star Wealth Manager award. This award highlights wealth management professionals who provide excellent service to their clients. Thank you to my colleagues and clients who made this possible! https://www.ameripriseadvisors.com/christina.asmus
If you have friends or family members who have financial questions or could use a second set of eyes, please let them know about my practice. I look forward to the opportunity to help your friend or family members achieve their financial goals.
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Christina Asmus - Financial Advisor in Bloomington, MN | Ameriprise Financial
